Oral Answers to Questions

CHILDREN, SCHOOLS AND FAMILIES

The Secretary of State was asked—

Small Schools

David Heath: If he will make a statement on the future of small schools.

Jim Knight: Local authorities have legal responsibility for determining the pattern of school provision most appropriate to their areas, taking account of parents' wishes. Small schools that are popular with parents must have a place in our educational system, and many serve rural communities. We will continue to support small rural schools through the presumption against closure, and by allocating funds to take account of the sparse population in rural areas.

David Heath: That is all very well, but up and down the country small schools are being closed by local authorities. If the Minister wants his "presumption" to be taken seriously, will he withdraw the guidance that was issued to every local authority in December, which threatened to withhold money for primary school buildings and renovation from authorities that did not close schools or remove so-called surplus places?

Jim Knight: The hon. Gentleman should note that we have reduced the number of rural school closures significantly, from a peak of 127 in 1983 to an average of just six a year over the last 10 years. The guidance to which he referred should be read in its entirety: it makes clear that if access for young children is to be preserved there may be a need for more surplus places in rural schools, and acknowledges that it will not always be practical or desirable to remove all such places. Somerset county council's work on federation of rural schools provides a model for how the situation should be tackled.

Brian Jenkins: Will my hon. Friend give a cast-iron assurance that when it comes to maintaining small schools—rural schools, in many cases—he will not necessarily be swayed by the views of parents, but will take a stance on what constitutes the best solution for the children? Multi-age classes are not always the best solution. They may make it possible for a school to be maintained, but the outcome is not good. Will my hon. Friend give that assurance that he will put children first?

Jim Knight: As my hon. Friend knows, we always want to put children first, but I repeat what I said to the hon. Member for Somerton and Frome (Mr. Heath). These are decisions for local authorities, and although we want them to listen to the views of parents, obviously we also want them to ensure that the individual needs of all children in their areas are met.

James Gray: The Minister said that the number of closures of small schools in our rural areas—against which the Government made a strong commitment in 1998—had declined to only six a year, but the fact is that we now have some 1,200 fewer small schools in our rural areas than we had in 1997 when the Government came to power. I have the figures in front of me. The Minister shakes his head, but I will happily show him the figures later. They are as plain as the nose on your face.
	We need more than just words and the paying of lip service to schools. What about cutting the bureaucracy, initiatives and general messing around that makes small schools so difficult to maintain?

Jim Knight: The hon. Gentleman should consider his own bureaucracy when he quotes completely false figures. Statistics of that kind do not relate to the number of schools that have been taken out of communities. They relate to the closure of schools as a result of mergers between infant and junior schools to form primary schools, and to a range of factors that do not feature in the rurality classification used by DEFRA. The statistics that we use are consistent. The hon. Gentleman should remind himself of the trend that we saw when his party was in power, which, as I have said, resulted in a peak of 127 closures of small rural schools in 1983.

David Taylor: Will my hon. Friend commend the track record of Leicestershire county council? It has never been under the control of the Labour party and has only been under the control of any party for the last seven years, but in a generation or more it has never closed a rural school, with the single exception of Tilton on the Hill, east of the city of Leicester. Is my hon. Friend satisfied that enough funds are being allocated to local education authorities in rural areas to allow them to skew their budgets to meet the recognisably higher cost of enabling smaller schools to exist in the medium term?

Jim Knight: I am happy to commend the job done by Leicestershire county council in managing its schools against the background of a relatively difficult funding arrangement, although even in Leicestershire funding has increased significantly over the last 10 years, and its dedicated school grant will include funds for sparsity. I do not have the Leicestershire figure in front of me, but Somerset, for example, receives £5.48 million in sparsity funding.

Nicholas Winterton: I am reassured by the Minister's emphatic statement that there should be a presumption against the closure of rural schools. Does he accept that, often, the school in a village is the only major facility, so keeping it open is of great importance? Does he believe that federation of some schools is a good way of getting over the problem facing many local education authorities? Perhaps a merger between a Church of England school and a Catholic school to make an all-faith school can help in keeping small schools, village schools and rural schools open.

Jim Knight: I never thought that I would say that I hope that local authorities have the imagination of the hon. Gentleman. He is entirely right that we should be looking more at federations. In my own constituency, hard federations have resulted in school buildings remaining open in two villages, but under a single head teacher and a single governing body. That has been extremely successful. In Somerset, as a result of a move towards federation that encompasses all but five of its primary schools, just 9 per cent. of primary school places are surplus places. That is the kind of thing that we want to see, alongside co-location of services, so that a range of children's services and other services can be offered from a village school to keep village communities alive.

Bob Spink: The Minister will be well aware of the value of small schools, particularly in his constituency in Dorset, where a view has been taken to keep schools open for the wider community benefit, as he has stated. I congratulate him on reducing the number of small school closures over the past few years. That is absolutely right. Will he help me on Canvey Island, where one of my small schools is under threat of closure from Essex county council because of low numbers, even though much more building will be forced on Canvey Island, which will increase the capacity requirement on the island? What is more, that school is making excellent progress. Will he ask the county council to declare a moratorium on that closure?

Jim Knight: I appreciate that the hon. Gentleman needs all the friends he can get right now, and I am happy to have a chat with him about what is going on in Canvey Island and about how he can have a constructive conversation with his former friends in Conservative-controlled Essex county council.

Capital Funding (Milton Keynes)

Phyllis Starkey: How much capital funding will be provided to schools in Milton Keynes local authority area in the next three years.

Jim Knight: Capital funding allocated for schools in the Milton Keynes local authority area in the next three years amounts to more than £75 million, including £30 million for growth. We are now considering Milton Keynes' application for additional growth funding to reflect its exceptional circumstances, which may result in further capital support. Of course I have been informed by the extensive representations made by my hon. Friend.

Phyllis Starkey: This morning I was at the start of the construction of the Milton Keynes academy in my constituency, so I am mindful of the money that we have had in Milton Keynes, but I have been making representations to support the bid by Milton Keynes council for the safety valve funding. Will the Minister confirm that, when he considers that, he will not just provide it according to formula but take into account the special needs of Milton Keynes?

Jim Knight: Naturally, following the representations that I have received, I will certainly seek to do that. I am glad that my hon. Friend was able to be at the academy this morning to see the results of the excellent investment that is going in, which has risen significantly from the low level of less than £10 million in 2001-02 to the high levels today. I am hopeful that we can make an announcement in the next few weeks about what we are going to do in respect of the application that has been made by her authority for the basic needs safety valve funding.

Mark Lancaster: The Minister is keen to trumpet the cash for Milton Keynes but less keen to confirm that there is now a £50 million shortfall in funding for Milton Keynes—confirmed to me by the Secretary of State in a letter on 4 February. That means that, at a time when the Government are forcing new houses on Milton Keynes, they seem less keen to fund the 10 or 12 new schools that we desperately need to accommodate that new housing. What exactly will the shortfall be for Milton Keynes over the next three years?

Jim Knight: Certainly Milton Keynes council argues that it needs another £50 million. As I say, we are looking at the representations that the council and others have made. The hon. Gentleman has also been to see me to discuss the matter, but he needs to bear in mind when talking about that to his constituents that his party plans a raid on Building Schools for the Future that will take £4.5 billion from areas such as Milton Keynes, meaning that two of the 12 secondary schools in his town may not even be rebuilt.

English and Mathematics

Tobias Ellwood: What recent assessment he has made of standards of attainment in mathematics and English in schools.

Edward Balls: As a result of our investment and reform since 1997, there has been an unparalleled rise in primary and secondary school standards in English and maths. Primary standards are at their highest ever, and record numbers of pupils left school in 2007 having gained five good GCSEs, including in English and maths.

Tobias Ellwood: I begin with a declaration of interest: I am a product of the international baccalaureate, so I did not do A-levels or GCSEs. As we are talking about raising standards in maths and English, why is the Secretary of State introducing a new form of diploma that has already proved very unpopular with the universities, when we have the international baccalaureate, under which English and maths are taught up to the age of 18, and which is popular not only with schools but with universities and employers? Why is the Secretary of State reinventing the wheel?

Edward Balls: I am pleased to hear that the IB did a good job for the hon. Gentleman, as it does for many pupils throughout the country. We have been trying to put together a qualification that can combine academic and vocational learning, and I must say to him—I can get him the detailed information if he would like it—that the diploma has been welcomed by a wide range of universities, including Cambridge university, whose admissions tutor said that a diploma in engineering could be better preparation than A-level maths. The diploma has also been welcomed by a wide range of employers. Conservative Members would do well to reconsider their opposition to our new diplomas, as they are the best chance in more than a generation to break the two-tier system in academic and vocational learning. It is revealing that the Conservatives remain on the two-tier side of the argument when it comes to educational qualifications.

Barry Sheerman: My right hon. Friend will probably agree with me that the evidence taken by the Education and Skills Committee shows that standards have been rising in both English and maths. Will he, however, look at the experiment in Warrington, where five schools are using different forms of information technology to advance teaching in maths and English? Will he also look into whether we can improve the training of maths teachers so that both the teaching and learning experiences can be improved?

Edward Balls: My hon. Friend is an expert in these matters, and he knows that 100,000 more young people are now making the required grade at key stage 3 in English than in 1997, and that 95,000 more are making the grade in maths. It is because we want to improve the teaching of maths and teacher training in maths that we asked Professor Williams to produce a report for us on mathematics, and it will be published shortly. Also, our new master's qualification in teaching will enable teachers to get in-career training in mathematics. I am happy to listen to my hon. Friend's points, and to look at the Warrington example and see what further lessons we can learn.

Peter Bottomley: I am glad that the Secretary of State is arranging to build on the work on maths teaching of Professor Adrian Smith of Queen Mary college. Will the Secretary of State or one of his Ministers get a list of the relevant secondary schools where A-level maths could be taught, find out which of them has not had a grade A in A-level maths in the past five years, and ask whether none of the pupils would have had the ability or aptitude to achieve that?

Edward Balls: I will be happy to get that information; I cannot say that I have brought it with me.

Dari Taylor: Will my right hon. Friend join me in congratulating the primary school teachers in my constituency? Over the past five years, there has been a greater than 40 per cent. increase in the children's English ability and more than a 25 per cent. increase in their maths ability. That is astounding delivery by the primary sector. What are we going to do to improve further primary school education?

Edward Balls: My hon. Friend is right, as the facts show. In 1997, only 63 per cent. of children reached key stage 2 level 4 at the age of 11; that proportion has now increased to 80 per cent., and in maths it has increased from 62 per cent. to 77 per cent. That is a real improvement in standards, but it is not enough; we want to get to much higher levels even than those. That requires us to do even more to back the learning of our primary school pupils and to tackle the barriers to learning both in and out of school. One way to make sure that we can do that is to improve even further the teaching of reading in the earliest years. Along with Lord Adonis and Professor Jim Rose, I visited a school on Friday to see how it is using phonics in the curriculum. That is now being done extensively in three quarters of all schools, but we want to get to 100 per cent. and we will do so over the next year.

Nick Gibb: Speaking of phonics, Sir Jim Rose in his report into the teaching of reading said:
	"'synthetic' phonics is the form of systematic phonic work that offers the vast majority of beginners the best route to becoming skilled readers."
	However, the Secretary of State, in his press release on Friday, in which he reported that a quarter of primary schools were not using phonics to teach children to read, and indeed in his response just now, does not use the term synthetic phonics. Can he therefore confirm the Government's policy? Is it that schools should use synthetic phonics, as recommended by Jim Rose, or is it a return to the mix of strategies that was the hallmark of the national literacy strategy?

Edward Balls: I know that no one is more keen on taking forward the issue of phonics and synthetic phonics in our curriculum than the hon. Gentleman. I am very pleased, therefore, that he read my press release. He will see that the first quote in it came not from myself, but from Sir Jim Rose himself; it was his findings that I was quoting. He was reporting on the progress on implementing his report and he says that all schools are using phonics, but that only three quarters are using them in the way that he would like—and we would like—which probably means using synthetic phonics in the way that the hon. Gentleman suggests. That will differ school by school, depending on the needs of different individuals, but Jim and I are clear on what needs to be done. We need to make sure that this is across all schools in the curriculum. The school that we visited was really interesting: 95 per cent. of children did not have English as a first language, and phonics was being taught not just in reading but in PE and right across the whole curriculum. I can therefore assure the hon. Gentleman that we are taking forward this agenda with determination, and we will make sure that the right kind of phonics are taught in all schools for all pupils.

Ashok Kumar: In September 2004, the Government appointed Celia Hoyles as the mathematics tsar to promote mathematics in our schools, colleges and universities. What assessment has the Secretary of State made of the tsar's progress in promoting mathematics in our schools?

Edward Balls: Celia Hoyles did a wonderful job, and we are really grateful for her work. She has laid the foundation for the strengthening of maths in the curriculum in primary and secondary schools, and we are taking that forward, including through the Williams review.

Alderman Blaxill School

Bob Russell: If he will visit the Alderman Blaxill school in Colchester to discuss its future with the head teacher, staff, governors, pupils, parents and representatives of the local community.

Jim Knight: I am obviously very grateful for the invitation from the hon. Gentleman and I am of course aware of the representations that he has been making about the future of Alderman Blaxill school, not least through last year's Adjournment debate, to which I responded. I know that there is an urgent need to raise standards at that school for the benefit of pupils, parents and the whole community.

Bob Russell: I am not sure whether the Minister will visit, but if not, will he receive a delegation from the school? Will he confirm that the latest Ofsted report, which was published this month, says that the school is now making satisfactory progress, which is no doubt entirely down to the inspirational leadership of executive head Mr. Jonathan Tippett? In view of the Minister's earlier comment that we should be looking more at federations, does he accept that the community resolution of the Roman river federation of secondary schools in south and west Colchester is the right way forward to save the three schools concerned?

Jim Knight: I am pleased to hear that the hon. Gentleman thinks that the executive head who has been brought in is doing a good job, and that is certainly what I have been told. However, the reports that I have from what I think was the most recent monitoring visit, in February—there may have been a more recent visit since then—show that progress since going into special measures is still inadequate. I have not been briefed on the Roman river federation, but I am very happy to look at the issue and to meet and talk with the hon. Gentleman, who has met my noble Friend Lord Adonis on a number of occasions to discuss the matter.

IT Projects

James Brokenshire: How much his Department plans to spend on IT projects in the next 12 months; and if he will make a statement.

Kevin Brennan: Subject to final spending decisions, the Department plans to spend £150.2 million on IT-enabled projects in the 12 months commencing 1 April 2008. That figure covers a wide range of investments in the Department's internal systems at a cost of £20.5 million, and in major IT-enabled policy initiatives at a cost of £129.7 million.

James Brokenshire: Despite the Department's spending millions on its ContactPoint database, the recent report by Deloitte and Touche highlighted the fact that significant data security risks remain with the project. Given that ContactPoint will draw together information on every single child in the country, creating a honeypot effect, what sort of risk does the Minister think is acceptable in relation to those sensitive data?

Kevin Brennan: I would not agree at all with the hon. Gentleman that the report identified significant risks. We commissioned the Deloitte report to look over the ContactPoint project, and it confirmed that ContactPoint has been developed very much with security in mind. The database is very important, and I hope that at some stage the Opposition will look very seriously at why we are setting it up. For example, there has recently been quite a bit of publicity about forced marriage. If we are to be able to identify young people who are at risk, we need to be able to share information between the professionals working with them. I hope that the Opposition will reconsider their position on ContactPoint.

Brian Iddon: Does my hon. Friend accept that the adoption of open-access IT systems can result in significant savings? Is his Department promoting their use throughout the education sector?

Kevin Brennan: BECTA—the British Educational Communications and Technology Agency—leads for us on that issue, but I agree with my hon. Friend that it is a way of achieving significant savings. As any modern business or any modern constituency MP knows, having properly IT-enabled systems is vital to serving the needs of children in this country and of our constituents.

Maria Miller: There is, however, a real and growing concern about IT database overload in the Department. It has three major databases of its own—ContactPoint, Connexions and the national children's database—and nine other children's databases feed into ContactPoint. May I take it from the Minister's response that there is a disagreement between the Secretary of State and the Secretary of State for Communities and Local Government as a result of the recent "Lifting the Burdens" report, which stated that the obsession with multiple databases has diverted attention from the most important task that the Department should have, which is delivering real support for families, or has the Secretary of State for Communities and Local Government got it wrong?

Kevin Brennan: As usual, that is a rhetorical rather than a substantive question from the hon. Lady. The point about ContactPoint and the other databases is that they exist to promote the welfare of children and young people in this country. I remind the House that ContactPoint was developed as a result of the Lord Laming inquiry into the Victoria Climbié case. I make no apologies whatever to the House for our continuing to develop that important project, which will enable professionals working with children to identify the other professionals working with them. That is a basic requirement of safeguarding children, and I hope that all parties in the House will support it.

Children in Poverty

Mark Harper: What recent discussions he has had with the Secretary of State for Work and Pensions on the proportion of (a) disabled and (b) non-disabled children living in poverty.

Beverley Hughes: I have had several discussions recently with the Secretary of State for Work and Pensions on a number of aspects related to child poverty, including poverty rates for disabled children. The Government are committed to our child poverty targets and improving the life chances of all children. In addition, over the next three years, a total of £340 million has been set aside by my Department specifically to improve the lives of disabled children and their families.

Mark Harper: The Minister will know that the Opposition share the Government's aspiration to eliminate child poverty by 2020, although I note that the Secretary of State for Work and Pensions conceded only recently that the Government were unlikely to hit their target of halving it by 2010. Some 55 per cent. of families in the UK with disabled children are living in poverty. To return to part of the announcement that the Minister has just made, will she update the House on what progress has been made in improving access to child care for families with disabled children, so that they are more able to access work?

Beverley Hughes: There are many reasons why the Government want to support families with disabled children. It is true that in some of those families the children are in poverty, but if the hon. Gentleman had read the excellent document that we produced last week, "Ending child poverty: everybody's business", he would have seen that it is not actually the presence of a disabled child that increases a family's risk of poverty; it is the presence of a disabled adult that significantly increases that risk.
	The Government want to halve child poverty by 2010 and eradicate it by 2020, and we remain absolutely committed to that. We have already reduced absolute poverty by half and we will continue to move children out of poverty through the Budget—unlike the previous Government, who were responsible for more than doubling the rates of child poverty. They made Britain the worst place for child poverty and reversed the upward trend in social mobility. We are reversing that legacy.

Tim Loughton: The right hon. Lady's boss, the Secretary of State, has made a considerable personal investment in the plight of disabled children, but last year the number of children living in poverty after housing costs were taken into account rose by 200,000. We now have a higher proportion of children being brought up in workless households than any European country, and they stay in poverty for longer. Given the disproportionate effect on disabled children, who are twice as likely to live in poverty and twice as likely to leave school with no qualifications compared with their peers, thus reinforcing the cycle of generational underachievement, is not the Minister embarrassed by the Government's lack of a truly joined-up approach to disabled children and poverty involving employment, education, transport, health and housing—or is this just another case of so what?

Beverley Hughes: The hon. Gentleman cannot have read the document that we produced last week or have considered the measures in the Budget. Those measures—increasing the rate of child benefit, changes to the child tax credit, and disregarding child benefit—will lift a further 300,000 children out of poverty, and taken with last year's Budget that is another 500,000. We are committed to reversing the disastrous and atrocious legacy that the Conservatives left children in this country. They said that unemployment was a price worth paying, and they cannot be trusted on the family. They say one thing, but when they have the chance they do—

Mr. Speaker: Order.

Teachers' Pay

Mark Pritchard: If he will make a statement on the teachers' pay settlement.

Edward Balls: The Minister for Schools and Learners made a written statement to the House on 15 January 2008 concerning the latest report of the School Teachers Review Body and our response. Following consultation on those proposals, we expect to make a further statement shortly.

Mark Pritchard: But with one in 10 teachers having been physically attacked in the classroom, with more than 33 knife attacks on teachers, and with 75 per cent. of all teachers having been verbally abused last year, does the Secretary of State agree with Lord Adonis that future pay settlements should include some sort of bonus or performance-related pay that is linked to improving discipline in the classroom?

Edward Balls: It is essential that we do even more to improve discipline in the classroom. We have taken substantial action, including in legislation, to ensure that we back teachers and give head teachers and governing bodies the power that they need to confiscate dangerous items and to act in and out of school. We will do more. That is why I have asked Sir Alan Steer to produce a report on the implementation of his report on behaviour and to suggest what we can do to improve behaviour further. When I speak to members of the National Association of Schoolmasters Union of Women Teachers at their conference next week, I will tell them that we are on the side of teachers in rooting out ill-discipline in the classroom and will give them the powers that they need. It may be a more serious issue than can be addressed through a bonus in pay: we will give teachers the powers they need to act, so that they can get on and teach.

Employment Choices

Judy Mallaber: What steps his Department is taking to encourage male and female school pupils to consider a wider and less stereotyped range of employment choices; and if he will make a statement.

Jim Knight: I expect schools and the external information, advice and guidance services that support them to be rigorous in challenging gender stereotypes and low career aspirations. We have taken, and are planning, a range of measures that make clear our expectations and which will embed good practice. For example, all 14 to 19 consortiums wishing to deliver diplomas have to undergo a rigorous diploma gateway process assessing them against a number of key criteria, including how they will challenge gender stereotypes and raise aspirations.

Judy Mallaber: I welcome that response. The Women in Work commission report and the recently published Select Committee report, "Jobs for the Girls", identified occupational segregation as one of the major reasons for the continuing gender pay gap. In view of that, will my hon. Friend consider the proposals in the Committee's report for providing further funding and resources specifically for careers advice and work placements, such as the proposal from the YWCA that boys and girls should have more than one work placement so that opportunities are not limited at too early an age through the assumptions embedded in families and society in general?

Jim Knight: I pay tribute to my hon. Friend's consistent championing of these issues in the House. We will, of course, look closely at the Select Committee report to which she has referred. I pay tribute, too, to the YWCA for the work that it has done. I met representatives of the YWCA before the Committee stage of the Education and Skills Bill, and they found that the lowest paid apprenticeship, hairdressing, is more than 90 per cent. female while the highest paid, the electro-technical trades, pays twice the average and is 100 per cent. male dominated. It is clear that we need to do better as regards careers advice. That is one reason why we have brought in a new quality standard, which all authorities will need to have regard to in the future.

Julie Kirkbride: Why does the Minister think that male and female pupils choose stereotypical employment? Is it nature, nurture or neither?

Jim Knight: The hon. Lady has raised an interesting doctoral question. I suspect, Mr. Speaker, that you would not want me to expand at any great length on it. I imagine that it is a combination of the two, but I leave hon. Members to reflect on where the balance lies. That does not take away from the need to do more about gender stereotyping. I saw an excellent example in a school that took year 7 pupils and gave them taster sessions of work experience that did not fit their gender stereotype. As a result, interest in such careers increased significantly. If people have access to such taster sessions, which are more nurture than nature, it can only be a good thing.
	Bullying

John Robertson: What steps he plans to take to reduce the incidence of bullying in schools.

Kevin Brennan: We are implementing a wide range of measures to help schools tackle bullying. These include reinforcing the power of school staff to discipline pupils who bully and providing them with comprehensive practical guidance on proven strategies for tackling bullying. We also provide support for individual schools through the Anti-Bullying Alliance, support peer mentoring schemes and fund a helpline for parents whose children are being bullied.

John Robertson: My hon. Friend will be aware that because of new technology, bullying now involves the internet and mobile phones. Sometimes, advertising such things makes the situation worse, as can be seen in some schools. What is my hon. Friend doing to try to solve the problem and what discussions has he had with service providers and schools to try to tackle that new kind of bullying?

Kevin Brennan: My hon. Friend is absolutely right. Bullying takes lots of new forms because of the new technology that is available. I agree absolutely that the virtual world is not a valueless world, and we should ensure that we enforce the same standards when dealing with online bullying or the use of mobile phones as we do when we deal with more traditional forms of bullying. We have taken measures to make it clear in law that schools can confiscate mobile phones when they are being misused and that discipline can be enforced beyond the school gates when bullying takes place online.

John Bercow: Given the finding of the Stonewall school report that no less than two thirds of lesbian, gay and bisexual young people have suffered bullying, will the Under-Secretary of State join me in congratulating Stonewall on the magnificent campaign that it is waging across the whole country, working through no fewer than 5,000 secondary schools, on the theme, "Some people are gay. Get over it!"? It is a good campaign that is making progress, and it has elicited a very positive response. We need to see more of that.

Kevin Brennan: Yes; unfortunately, the legacy of section 28 lives on to a certain extent in our system. I commend the hon. Gentleman for his work on equality as a pioneer in his party on the subject. He will be aware that we issued guidance on homophobic bullying last September. In fact, I know that my right hon. Friend the Secretary of State attended an event with Stonewall a month ago in relation to that.

David Chaytor: On the legacy of section 28, does my hon. Friend agree that homophobic bullying is not just a matter of victimising pupils who are gay or lesbian, but about the routine use of the terms "gay" and "lesbian" as forms of abuse? Does he recall that the Select Committee on Education and Skills report on bullying last year placed huge emphasis on the role of head teachers and governing bodies in establishing firm anti-bullying policies in schools? Will he incentivise efforts to stress the importance of that to head teachers and the chairs of their governing bodies?

Kevin Brennan: I am happy to do that, and to confirm what my hon. Friend said. We all agree that relationships in our schools should be based on respect—respect between teachers and pupils, respect between pupils and respect between families and parents who use the school. That is why we issue anti-bullying guidance on all forms of bullying. I am happy to tell the House that in the near future we hope to issue the guidance that we have been developing on tackling the bullying of children with disabilities.

Ofsted Inspections

Graham Brady: If he will bring forward proposals allowing schools to request an Ofsted inspection.

Beverley Hughes: Schools are already able to request an Ofsted inspection, although I understand that such requests are rare. The hon. Gentleman will understand that it is important that the chief inspector of schools has the capacity to target inspection resources where they are needed most. The decision whether to inspect, following a request, is a matter for the discretion of the chief inspector, taking into account factors such as the timing of previous inspections.

Graham Brady: I am grateful to the Minister, who is my constituency neighbour and who knows my local schools well. She knows that I have four grammar schools and four non-selective high schools, all of which are excellent. Of the non-selective high schools, three have already been awarded an "outstanding" categorisation by Ofsted. The fourth—Blessed Thomas Holford Catholic college—is confident that it, too, will be found to be outstanding. It is keen to receive that categorisation as soon as possible, so that it can proceed with applications for a second specialist status. I think that it will take comfort from the Minister's words, and I would be grateful for any support that she can give.

Beverley Hughes: I welcome the finding, in the school's last inspection report, that parents and pupils hold the school in very high regard and that it performed very well across the piece. For reasons that the hon. Gentleman will understand, schools are now given minimal notice of inspections and so cannot choose when an inspection takes place, but if the school wants to make a request to Ofsted, Ofsted will consider that request for an inspection on its merits. I understand that the school must be inspected by June next year, so an inspection must be on the cards in the near future.

Admissions Process

Greg Hands: What assessment he has made of the effects of the changes in the secondary schools admissions process in 2007.

Edward Balls: The data that my Department published last week showed that, for the first time, 82 per cent. of families received an offer of a place at their first choice of school, and 93 per cent. of families received an offer of a place at one of their first three choices of school; both of those figures are an improvement on last year. The new stronger admissions code that was introduced last year has been widely welcomed. We are determined to ensure that all schools comply with the code.

Greg Hands: In constituencies such as mine, there is enormous stress and upset over secondary school admissions at this time of year. In Hammersmith and Fulham last year, 40 per cent. of pupils did not get their first choice, and 10 per cent. got none of their choices. That is despite the best efforts of the Conservative council in Hammersmith and Fulham to extend secondary school choice, so why does the Secretary of State simply say that parents should "engage in the appeals process", when the real issue is that there are not enough quality secondary school places?

Edward Balls: The hon. Gentleman is right in his figures: about 60 per cent. of parents in his area got their first choice, and 90 per cent. got one of their preferences. I agree with him—in the end, the only way to deliver fairness for all parents is to make sure that every school is a good school. If we do not do so, we will always have some schools that are over-subscribed. I know that in his area there are three single-sex faith schools that are particularly over-subscribed. That is why I hope that he will back my national challenge programme, which seeks to reduce to zero the number of schools where less than 30 per cent. of pupils get five good GCSEs including English and maths. In 1997, that was the case in more than half of all schools—more than 1,600. We have got that number down from 1,600 to 638, and our pledge is to get it down to zero. I would like his support in making that happen.

Fiona Mactaggart: In Slough local education authority, which is a selective education authority, this year only 41 per cent. of parents received a place at their first-choice school. Some 10 or 11 per cent. of parents were offered places at schools that they had not identified, and there are still 40 parents in Slough who have not yet got an offer of a school place. Given those circumstances, will the Secretary of State meet me to discuss what we can do in Slough education authority, which has improving schools but not enough school places for our local children, and to see what can be done to meet the needs of parents in our area?

Edward Balls: I am happy to have that meeting with my hon. Friend and the Minister for Schools and Learners. The situation in Slough is quite concerning; the numbers there are substantially out of line with those in comparable authorities in the south-east. The number of pupils getting their highest preference was 38 per cent. in Slough, compared with an average of 79.5 per cent. in the south-east. As I look at the list of numbers in front of me, Slough seems to be at pretty much half the level of every other area in the south-east. Clearly, that is not acceptable. We need to see what is happening and whether the schooling system or the local authority are not getting it right. We are happy to meet my hon. Friend and see what we can do to help.

Child Care

David Burrowes: What recent representations he has received from child care providers on the Government's child care policy.

Beverley Hughes: Child care providers in the maintained and the private, voluntary and independent sectors all have a vital role in ensuring that local authorities can fulfil their new duties to secure sufficient child care for working parents and parents with disabled children, and to improve the well-being of young children. I am personally very keen to hear the voice of providers, and I take every opportunity to do so. I want local authorities to do the same.

David Burrowes: Will the Minister therefore hear the voice of the voluntary, private and independent providers in my constituency? They are concerned that following the full implementation of the code of practice next month, there will be a loss of provision in my constituency. Many are concerned that the Government do not understand that what is effectively a one-size-fits-all approach does not take account of the shortfall in funding.

Beverley Hughes: I would have those concerns, if they had proved to be true. The hon. Gentleman is jumping the gun somewhat. I understand that so far a third of providers have signed the new funding agreement with Enfield council, his local authority, and that the rest of them have almost three months to do so. I am clear that the £3 billion that the Government are putting in for the free entitlement is absolutely adequate.
	I ask the hon. Gentleman to consider the amount of money that his council is forwarding to private and voluntary providers. Given the size of its dedicated schools grant, the allocation is less than the national average. I suggest that the hon. Gentleman talks to his council to see whether it is passing on all the money from the Government that it can.

Topical Questions

Desmond Swayne: If he will make a statement on his departmental responsibilities.

Edward Balls: This morning, my Department put before the House three written statements. The first was on the reform of the funding of 16 to 18 and adult education, and the second was on the steps that we are taking to ensure that we have the toughest ever vetting and barring system for all those working with or seeking to work with children and vulnerable adults. I am grateful for the constructive way in which the hon. Members for Surrey Heath (Michael Gove) and for Yeovil (Mr. Laws) have discussed those difficult issues in recent months. I have offered them today a further meeting to discuss the detail of that statement in due course.
	The final statement was about ensuring proper implementation of the school admissions code. Today, I am publishing regulations to extend the period for referring objections to unfair admissions arrangements. I am also publishing my letter to the schools adjudicator asking him to report on compliance with the code this year, with an update in July and a final report on 1 September. I pay particular tribute to the faith organisations that are working closely with us to ensure compliance with the code, and I welcome their statements today. I hope that the measures will have the support of both sides of the House as they ensure that all parents and young people can have fair admissions through fair compliance with the code.

Desmond Swayne: I look forward to reading the three written statements. The Secretary of State has said that by defending A-levels one is committed to excellence for only a few. Is he seriously telling us that after 11 years of Labour Governments, only a few are capable of taking on A-level study?

Philip Davies: "So what?"

Desmond Swayne: That is not the answer that I want.

Edward Balls: I am happy to say that last week in the House I was pointing out the weakness of the Opposition on education policy. Let me say what would be weak of me. It would be weak of me not to take action when I have clear evidence of unfairness in the admissions code. It would be weak of me not to put forward diploma proposals which extend across the academic and vocational divide and which I have said will exist alongside A-levels and will deliver excellence for all. It would also be weak of me not to fight the corner for more investment in education alongside heath and defence—a fight that I fear that the hon. Gentleman has been losing in recent weeks.

Hugh Bayley: When I spoke to the Sure Start team in York today, they stressed that they have health visitor team leaders in their Sure Start children's centres. Sure Start has given thousands of children a better start in life, and health visitors are part of that. Does the Secretary of State agree that it would be wrong—robbing Petra to pay Paula—to take money away from Sure Start to fund health visitors, and will he give me a commitment to retain the funding for both?

Beverley Hughes: Yes, I can. Leaving aside the gender stereotype and the fact that we want more men in those professions, I agree with my hon. Friend on his question and the points that he makes. To be serious for a moment, it is very dispiriting when we constantly have sniping and undermining of Sure Start by the Conservatives. As the national evaluation has recently shown, Sure Start is making a real difference, which is why we on the Labour Benches will reject any proposals to cut outreach workers—a policy that would undermine Sure Start and hit the poorest families most. Yet again, the Tories' sums do not add up. They are saying—

Mr. Speaker: Order. When I tell the right hon. Lady to stop attacking the Opposition, she stops—she does not continue after she is told.

Michael Gove: Last week, on the day that we discovered that 100,000 families had been denied their first choice of school, the Government named three local authorities in which they claimed that a significant minority of schools were in breach of the admissions code. The Secretary of State said that a disproportionate number were voluntary aided—that is, faith schools. This was not a handful of schools, he said—it was certainly in the tens. He specifically drew attention to schools demanding money for places. However, we now know that the allegations were made after what he has conceded was "unverified desk research". Was it wise to point the finger at faith schools before the research had been verified?

Edward Balls: It was the right thing to do, and I make no apology whatever. Last week, we set out the good news that 80 per cent. of parents—indeed, more than last year—are getting their first choice of school. That is good news, not bad news, and I am very proud of what has been achieved in that respect. As I said in my statement last week, we did an internal piece of work that showed that although the vast majority of maintained schools and academies were compliant with the code, a significant minority, which are disproportionately voluntary aided and foundation schools, were non-compliant. The advice that I received, which I took, was that we should verify the data before making them public school by school, but I felt that it was right that if I was verifying that information around the country I should also make it clear and public what we were doing, and that is what I did. Just to give one example—

Mr. Speaker: Order. Next question.

Michael Gove: It is revealing that the Secretary of State has said that it was his decision to go public with that announcement, because it is important to have one's facts straight before criticising minority faith schools. This is what head teachers of schools in Barnet have said:
	"I do not understand why the allegation of school places for sale was made—the allegation was completely unfounded".
	Another said:
	"It was extremely worrying that I was rung up by the press before I had received any letter from the Department".
	Another said:
	"I was outraged and insulted to receive suggestions that we were asking for financial contributions to secure places".
	The Secretary of State knows that many of the schools against which allegations have been made receive purely voluntary contributions to pay for the security of Jewish children under threat from extremists. The schools adjudicator has now been told to lead an inquiry into school admissions. Surely it would have been better to wait until that inquiry had reported and verified pronouncements before singling out faith schools in this way.

Edward Balls: Not at all. The fact is that voluntary contributions for security or other purposes are entirely legal under the code. What is not allowed is to ask for contributions as a condition of application to schools. The hon. Gentleman should be careful about jumping to conclusions; he should wait for the detailed data that we will publish. The reason why the faith organisations—I could quote the Board of Deputies, the Catholic Education Service or the Church of England—today supported publicly what we are doing is that they know that the credibility of the admissions code depends on dealing with these issues.
	Mr. Speaker, may I please give you one example of an e-mail I received from a parent? She said that she was applying to a school where the application
	"requires parents to state their occupation, sign a form agreeing to give permission to claim Gift Aid...and complete a standing order. The fees chargeable are stated in the prospectus as £37.50 per month. This must be submitted along with the application form to the school. Before I submit any of this information I would like to know if I am legally obligated to do so."
	The answer is that she is not obliged to sign a form saying that she will pay £37 a month before applying to a school—

Mr. Speaker: Order. Both Front Benchers are saying too much here. Topical questions are for the benefit of Back Benchers, so that they can put brief questions and get brief replies.

Ashok Kumar: Last week, the Chancellor announced an extra £30 million for a science fund for schools. May I ask the Secretary of State how schools in my constituency can access this fund? I invite him to come to my constituency to see the excellent work being carried out at Freebrough engineering college to train future scientists and engineers.

Jim Knight: Naturally, I would be extremely pleased to visit my hon. Friend's constituency, particularly as he is a consistent advocate for the importance of science. The £10 million of Government funding for Project Enthuse that was pledged by the Chancellor last week will be matched, we expect, by equal investment from business and the Wellcome Trust to make £30 million. Secondary schools will be able to develop the skills and knowledge of their science teachers through professional development as a result of that investment.

Tony Baldry: If diplomas are to be introduced successfully this September, parents, pupils and employers need to understand what they are all about. The children's plan toolkit, published today, contains five brief paragraphs on diplomas, one of which says that GCSEs and A-levels can be taken either as part of diplomas or alongside diplomas, which is confusing for people who do not understand the system. What will be done between now and September to explain to parents, pupils and employers, in a pamphlet or brochure, what diplomas mean and what their value is, so that there will not be confusion at the start of the autumn term?

Jim Knight: I will make a written statement to the House tomorrow on the take-up of diplomas in the second of the consortiums. Alongside that, for which there has been good take-up, we will continue our communications campaign. In my constituency, there has been full take-up of the construction and built environment diploma as a result of radio advertising locally and throughout the land. We will continue to try to get the message out to parents, but it will always be a challenge to get people to understand what we are suggesting for a brand new qualification. Roughly, the process will involve the equivalent of three days' curriculum time and we expect to see people taking GCSE English and maths at level 2 alongside the diplomas.

Jim Cunningham: I know that the Minister answered a similar question earlier, but are there any further initiatives he can take to protect teachers from abuse and violence in the classroom?

Kevin Brennan: As I have said, we have taken initiatives to ensure that teachers have the authority to discipline pupils, including the confiscation of mobile phones, and to discipline pupils for behaviour beyond the school gate. I know about the concerns about behaviour. We are determined to raise the bar, which includes asking Sir Alan Steer to conduct a review of the measures brought in as a result of his earlier review. There will be a report on an interim basis in the near future, and on a more detailed basis after that.

David Laws: Last month, the Department confirmed that in the past year it has carried out investigations into two of its contracts with private sector contractors. One of those investigations has led to a referral to the police. Will the Minister tell us what the allegations were, which private sector contractors were involved, and the outcome of the investigations?

Kevin Brennan: The matters that the hon. Gentleman has mentioned have been the subject of written questions from him. Many aspects of those matters are covered by commercial confidentiality. I am happy to meet him if he wants to discuss the issues further, and I confirm that there have been police investigations into some of those matters.

Andrew MacKinlay: This morning, the Secretary of State for Children, Schools and Families and the Secretary of State for Culture, Media and Sport announced £5 million for GCSE and A-level music and dance at. Will my right hon. Friend ensure positive discrimination in allocating those scarce resources to the most disadvantaged schools, rather than to middle-class schools, which have all the gravitational pull of the high expectations of parents, pupils and teachers? Will he ensure that we act as a socialist Government and allocate the money to the poorest and most disadvantaged in our community?

Edward Balls: Of course I can do so, and Lord Adonis will take forward that socialist policy. Evidence shows that dance is an effective way of encouraging especially girls in their early teenage years to keep active and participate in PE and games. We will ensure that that is available for not only some but all schools, and for all young people in every community in our country.

Nigel Evans: I assume that that is new socialism, not to be confused with old socialism. At a time when we are teaching youngsters to be more environmentally aware of what they can do to help save the planet, we also tell them that they cannot go to their first, second or third choice of school, that they cannot get on the bus that starts in their village to the schools that they want to attend, and that parents have to get into a car and drive some distance to another place. May we have a little more joined-up thinking so that we practise what we preach and let youngsters go to schools that are nearer where they live?

Jim Knight: As the Secretary of State said earlier, it is important that there is a choice of good schools for every parent in the country. That is why we introduced the national challenge. I was pleased that, in Lancashire, 97.6 per cent. of parents got a school of their preference and that 87 per cent. got their first choice. That is better than the national average. Lancashire is doing a good job—incidentally, under a Labour administration—in providing the good schools that every parent legitimately wants.

European Council

Gordon Brown: With permission, Mr. Speaker, I would like to make a statement about the European Council held in Brussels, which I attended with the Foreign Secretary on 13 and 14 March.
	I begin with the most important concern that the Council addressed: the need to ensure that, faced with global financial turbulence and what the Council identified as a deteriorating global economic outlook, high global oil and commodity prices and volatility in exchange rates, we continue to do all we can, with co-ordinated action at European and global level, to maintain stability and growth.
	All European member states agreed to measures for greater financial market transparency: first, prompt and full disclosure of exposures to structured products and off balance sheet activities; secondly, more rigour in credit ratings; thirdly, improvements in valuation standards, particularly for illiquid assets; and fourthly, a strengthening of risk management under the capital requirements directive.
	Given the globally transmitted nature of the risks, it is clear that many of those recommendations—the changes to credit rating agency operations and assessments; risk management and disclosure by global financial institutions; changes to capital adequacy rules; and arrangements for valuing financial instruments—which have also been proposed as measures for change by the American Administration, can best be implemented at a global level.
	In welcoming that international dialogue as the first step in reform, I can tell the House that the Chancellor of the Exchequer is today writing to the G7, the International Monetary Fund and the Financial Stability Forum to call for co-ordinated international action on transparency and disclosure, better risk management and action on credit rating agencies to be agreed when the G7 and the IMF meet from 10 to 12 April.
	In line with the approach of other major central banks, the Bank of England has this morning announced a further £5 billion liquidity support to financial institutions, and a new group has been set up to improve liquidity in the mortgage market.
	At the European Council I made it clear that, while our economy is resilient and fundamentally strong, we will at all times remain vigilant and, especially at this time of global uncertainty, continue to take whatever action is necessary to maintain economic stability and growth.
	The Council also discussed a new approach to the rising number and economic power of sovereign wealth funds. I strongly welcome the conclusions. Sovereign wealth funds are now worth $2 trillion, but may soon potentially be worth $10 trillion. Our new approach—calling for a voluntary code of conduct based on best practice, openness, transparency and corporate governance—is one that will enable funds to show that they are commercial in their operations.
	The Council also discussed food and energy price inflation, and agreed further steps to monitor worldwide inflationary pressures. We agreed that the current global financial turbulence was not a reason to postpone fundamental economic reforms that are essential to building a more competitive European economy. We agreed that we should now press ahead with the liberalisation of markets and with new investment in knowledge and innovation. That includes further liberalisation in the energy, post and telecoms markets, which could generate up to 360,000 new jobs.
	We discussed the need also for an economic reform strategy that looks beyond Lisbon—a comprehensive strategy to improve the business environment, strengthen relations with China and India, put our creative and knowledge industries at the forefront of the world economy, and make European universities leading global players, in particular through increasing their contacts with business. So the next stage of the Lisbon agenda will include a review of human capital and skills in Europe, and a renewed focus on competition policy in the single market.
	The second major issue discussed by the Council was climate change, and it is essential that we achieve our ambitions of a comprehensive post-2012 agreement to reduce greenhouse gas emissions and of Europe leading the world in a low-carbon economy.
	In December, the united European front at the climate change negotiations in Bali played an important part in the historic breakthrough that agreed the need to make large cuts in emissions and achieve a new climate deal within two years. Only a common European approach—a Europe with Britain not at the margins but at the centre, leading the world—can ensure a global low-carbon economy founded on our proposal of a global carbon market.
	Building on this commitment, the Council agreed an ambitious schedule for adopting a package of measures to cut emissions by 20 per cent. by 2020 or by 30 per cent. as part of an international agreement. The Council also agreed with the UK on the need for an effective EU emissions trading scheme to provide the incentives to drive carbon reductions in the most cost-effective way and for a cap on emissions set centrally, with a clear emissions reductions trajectory to give investors the predictability that they now need.
	The Council also considered a report from the EU high representative on the security implications of climate change and, at our request, agreed to submit recommendations on follow-up action—including intensifying co-operation with countries outside Europe—by the end of the year.
	Meeting the EU's climate change targets requires not just action to reduce carbon emissions from energy suppliers and industry, but incentives to change individual behaviour. The Council will now invite the Commission, in bringing forward its legislative proposals on VAT rates, due in the summer, and working with member states, to examine areas where economic instruments, including VAT rates, can play a role in increasing the use of energy-efficient goods and energy-saving materials, from, as the UK has proposed, insulation and household materials to energy-efficient electrical goods, where VAT is cut.
	The Council also agreed on the importance of achieving a fully functioning and joined-up internal energy market, as an essential condition for the secure, sustainable and competitive supply of energy across Europe. We also committed to an energy agreement by June this year. It is clear that energy security is strengthened by a policy that takes a collective approach to third-country producers, notably Russia.
	Europe can also play a part in ensuring stability beyond its borders. The Council agreed to build on existing co-operation to establish a "Union for the Mediterranean", to promote security and stability in the wider region and to provide a framework for co-operation between the EU27 and other Mediterranean coastal states on political and security issues, as well as economic, social and cultural affairs. That new union will be launched during the French presidency in July this year.
	We also agreed that international development issues and the achievement of the millennium development goals, as well as Europe's continuing leadership as the biggest contributor of aid in the world, will be the subject of a major discussion at the European Council in June.
	The outcome of the Council and the preparations that are being made for June affirm the conclusions of the debate that we have had in the House over the past nine weeks: they demonstrate that, with the completion of the Lisbon treaty, we now have an opportunity to move beyond institutional issues to create a more outward-looking, flexible and global Europe, and to address the challenges that matter most to the citizens of Europe.
	With three quarters of a million businesses, 3.5 million jobs and 60 per cent. of British trade dependent on our relationship with Europe, we should do nothing to put the stability of that relationship at risk. It is only by working constructively and remaining fully engaged with our European partners that we properly address the challenges ahead.
	As we prepare for the European Council in June and the French presidency later this year, our aim is that European countries working together can lead the way on climate change, on security, on international development and on the response to global financial turbulence. I will be discussing with President Sarkozy when he visits Britain next week how we can take all these challenges forward during the French presidency. I commend this statement to the House.

David Cameron: I welcome the focus of this Council: global competitiveness, global poverty and global climate change. This is the right agenda. On climate change, the first thing that Governments should do is get their own house in order. The draft communiqué included specific targets to reduce energy use in Government buildings, offices and cars. Will the Prime Minister explain why those specific targets were removed from the final text agreed at the weekend? Looking at our own record here in the UK, does the Prime Minister accept that 14 Government Departments are less energy-efficient than they were eight years ago, and that 15 Government Departments have actually increased their carbon emissions during that time— [ Interruption. ] He asks what this has got to do with Europe. I think we should be leading by example. In a similar context, will he confirm that, despite the fine words in the Budget about plastic bags, the Government have bought 1.2 million Whitehall-branded single-use plastic bags in the past two years?
	The Prime Minister is right to say that the success of the emissions trading scheme is vital. Will he acknowledge, however, that the Lisbon treaty is completely irrelevant to making that happen? There are six words on climate change in the treaty and, as the House of Lords Committee pointed out last week, they have no legal significance. Is it not the case that we do not need a new constitution or a new treaty to deal with climate change at EU level?
	Everyone will welcome the Prime Minister's intention to use indirect taxes, including VAT, as incentives for green behaviour. That is something that we have put forward in our own quality of life policy group report. The Commission said that it had doubts about whether the proposal was workable. One EU diplomat said that the agreed wording was
	"a polite way of saying no",
	and
	"a way of saving face".
	In regard to the outcome that we all want, is the Prime Minister sure that he is right and that that EU diplomat was wrong?
	On the economy, Ministers discussed the recent turbulence in the financial markets. Clearly, proper co-ordination by central banks is going to be essential. Will the Prime Minister guarantee that his approach of putting the Financial Services Authority, rather than the Bank of England, in the lead to rescue British banks in distress will not make the process more difficult?
	The final communiqué from Brussels warns Governments across Europe about the dangers of high deficits. Will the Prime Minister confirm that Spain's budget is in balance, and that Germany, the Netherlands, Denmark and Sweden all have budget surpluses, while Britain has the largest budget deficit in western Europe? Does he now regret the fact that we are the one country that failed to prepare for the downturn by putting money aside in the good years?
	The other main issue for Europe to focus on is global poverty and the urgent need to make rapid progress on the Doha round. Will the Prime Minister tell us why the EU seems to be showing so little urgency in getting the deal moving again? The commissioner in charge of those negotiations is Peter Mandelson. Whatever any of us may think of him, I have always had very helpful briefing from him on trade and, I have to say, on other issues, too— [ Laughter. ] The Leader of the House should not laugh; she might put herself in jeopardy. What matters is that there should be a clear decision on whether he is going to serve another term. It cannot be in anyone's interests for the commissioner's future to be the subject of endless speculation. Will the Prime Minister tell us today whether Peter Mandelson is going to go on doing his job, or whether that decision is to be the subject of further dithering?
	While Ministers were in Brussels, there was violence— [ Interruption. ] Look, I thought the boot boy had been told to calm down. I read in a Sunday newspaper that he was actually the soon-to-get-the-boot boy. Soon, he might have to go and sit in another part of the House. I see that the Prime Minister is laughing. I think your career—you will be on the same conveyor belt as the Leader of the House.
	While Ministers were meeting in Brussels, there was violence on the streets of Tibet. An EU statement on Tibet has been issued today, which I am sure the whole House will welcome. Britain rightly works closely with China and we very much welcome the way it has opened up its economy, but is it not vital that the Chinese Government understand that with the greater role they play in the world comes greater responsibility? Does the Prime Minister agree that the strong relationship we all want with China requires us to be candid and frank, even on issues where we disagree?

Gordon Brown: I will deal with each point, but is it not remarkable when 3.5 million jobs are dependent on our membership of the European Union and when European co-operation on the environment was crucial to what happened at Bali that the right hon. Gentleman can say so little about the advantages of co-operation in Europe, and that he should spend his time attacking the European Union rather than seeing the benefits in it?
	The right hon. Gentleman says that the environment is nothing to do with the European reform treaty, but it is the first time we have set down as a strategic objective that the environment is an important issue and it is there in the treaty. All the other parties in Europe believe it is important that the environment be at the centre of Europe's work and if I may say so, if we are to lead the world on the environment, we will need to co-operate with our European partners.
	The right hon. Gentleman also raised the question of how we as a country are cutting emissions. We are one of the few countries meeting our Kyoto targets and we will continue to do so. One of the reasons why we are meeting them is that we implemented early on in our Government the climate change levy, which the Conservatives continue to oppose.
	I find it very strange for the right hon. Gentleman to be raising issues that compare us with the rest of Europe in terms of economic progress. We have lower inflation than the rest of Europe and we have a history of stability and growth. He will find, during the course of this year, that the American deficit will be higher than the British one because people are taking the right action to deal with the global financial turbulence. I am sorry that the right hon. Gentleman has so little to say in support of the action that the European Union and, indeed, all international authorities are taking on the economic issues confronting them. If the Conservatives want to be a serious party, perhaps they could actually address the serious issues of economic progress.
	As far as the issues about Tibet are concerned, the right hon. Gentleman is absolutely right that, although it was not discussed at the European Council, all of us are concerned about what is happening there. We have made our views known to the Chinese authority: we believe that there should be restraint and an end to violence; and we believe that there should be a dialogue between the different authorities, which should happen soon. It is very important to recognise that at this time the whole world is looking to China to see what the reaction will be.
	The right hon. Gentleman also raised the issue of trade and may I say that we, too, have been pushing the rest of the world because we believe it important to use this window of opportunity to get a trade deal? That is why we are working as we are with the European Trade Commissioner and why it is essential to move other countries forward to see if we can get a deal.
	One of the people who was at the European Council during the course of the weekend was the Czech Prime Minister. Until recently, he was the Conservative party's only supporter in Europe. What he is saying now, however, is that failure to support the reform treaty will leave the Czechoslovakian people isolated in Europe. That is exactly what would happen to this country if we ever listened to Conservative advice.

Nicholas Clegg: I am grateful to the Prime Minister for his statement. As European summits go, the conclusions were workmanlike; largely welcome, but fairly unremarkable. I wonder whether that is in part because of the issues that were omitted. Notwithstanding the Prime Minister's words about Tibet today, will he explain why there was no discussion among EU Heads of State last week on Tibet? Does he not think that it is precisely the actions of the Chinese authorities in Tibet that should be the subject of discussion between European leaders?
	I know that the Prime Minister is extraordinarily reluctant to do anything, it seems, to annoy the authorities in Beijing, but will he none the less confirm today that he will follow the lead of President George Bush and of Chancellor Angela Merkel and meet the Dalai Lama on his forthcoming visit to London to express solidarity with the Tibetan people?  [Interruption.] As the Prime Minister knows, I have written to him about that on two occasions and still not had a clear answer— [Interruption.]

Mr. Speaker: Order. Allow the right hon. Gentleman to address the House. Not to do so is unfair.

Nicholas Clegg: I congratulate the Prime Minister on inserting, at the last minute, a reference in the conclusions to his laudable aim of reducing VAT rates on environmentally friendly goods, but why did he apparently go about that in such a bizarre fashion? Why did he spring it on his colleagues—if reports are to be believed—at the last minute through a letter with President Sarkozy? Is that really the best way to show leadership and do business in the EU? My worry is that the manner in which the proposal was spun in the press had as much to do with obscuring the Government's woeful record on the environment, compared with that of other EU countries.
	We are now 25th—25th—out of the 27 EU member states on the use of renewables, and more than 25 per cent. of our carbon emissions come from our housing stock, compared with 5 per cent. in Sweden, which is a much colder country. We have a recycling rate well behind that of France, Germany, Spain and other countries. The go-ahead is being given to Kingsnorth power station—the first in a new generation of coal-fired power stations—without any effort being made to use carbon capture technology, and the go-ahead is being given to a third runway at Heathrow. The list goes on.
	Does the Prime Minister not accept that he can make all the noise he wants about his VAT proposal, but our green credentials in the EU will never be strong unless real action is taken across a much broader range of issues? For instance, will he commit today to giving support to a new draft directive on the geological storage of carbon, which is being drafted in the European Parliament and which would oblige all member states to accelerate the use of carbon capture technology at all the coal-burning power stations?
	I strongly agree with the Prime Minister that there is a pressing need to move towards a fully integrated and competitive energy market in the single market. In particular, the EU needs the powers to take action against monopoly energy providers in markets such as France and Germany. Does he agree that the new Lisbon treaty would give the EU precisely those powers further to liberalise the EU energy market, and that that is just another example of the benefits that the treaty would bring the British economy, which the Conservative party is so keen to deny the British people?
	I warmly welcome the Prime Minister's remarks about co-ordinated action at European level to ensure stability and greater transparency in the financial markets. The reverberations around the global markets today, caused by the news that the US investment bank Bear Stearns is to be taken over at just 2 per cent. of its share value compared with 12 months ago, show how timely the EU's Council statements are.
	It is critical, at a time when liquidity remains so tight for the world's banks, that steps are now taken to ensure that this does not create an environment where credit is being withdrawn for millions of ordinary people. That is why we must also now pioneer reforms to the system of lending to ensure that we do not find ourselves in a similar position in years to come.
	Does the Prime Minister agree that while it is critical that the capital requirements directive be reviewed if we are to prevent a further boom-and-bust cycle in the credit markets, we must be prepared to use levers to control supply as well as demand for credit?

Gordon Brown: I am grateful to the right hon. Gentleman. First, may I correct him on VAT? I first raised the issue months ago with our European colleagues; I have been following it up ever since. I am grateful that we now have an agreement to look in detail at whether VAT reductions on matters such as household materials and electrical goods can be beneficial both in encouraging people to use energy-efficient products and in stimulating a market where Europe can benefit in the future. So, he is wrong to say that this was raised only on the day of the Council. We have been pressing our European colleagues on the matter for some time.
	I agree with the right hon. Gentleman on the importance that we attach to environmental issues. Again, I have to correct him. Carbon capture and storage is something that we have been pushing right across the EU. There will be 12 demonstration plants, and one of them, we believe, will be in the UK, but we want the European Commission to make it possible for there to be greater incentives so that people will develop carbon capture and storage at a quicker rate.
	The right hon. Gentleman is right about energy liberalisation and the importance that we attach to it in the EU. That is one of the reasons why qualified majority voting in energy matters will be beneficial, opening up markets and the creating of jobs, although it was opposed by the Conservative party.
	I disagree with the right hon. Gentleman about Britain's record in relation to other countries. I repeat that we are one of the few countries in the world that is meeting its Kyoto targets, and we will continue to do so.
	On the economy, I hope that the right hon. Gentleman will agree that Europe is leading the way on calling for a proper international response. We had a meeting with Chancellor Merkel, President Sarkozy, Mr. Prodi and the President of the European Commission a few weeks ago. We have now put forward proposals in detail. The Chancellor is writing to all members of the IMF, the G7 and the Financial Stability Forum to push these forward. Our proposals are in harmony with those that have just been put forward by the US Treasury Secretary. To ensure confidence in financial markets, we believe that it is important that those proposals are adopted.
	Finally, I agree with the right hon. Gentleman when he says that action to express our views on Tibet is important. People around the world are expressing concern. We have made our views known, and there will be an EU statement later today. There is a demand for restraint on the part of the Chinese authorities. These are the most important matters now. We will make other announcements and decisions in due course.

Ann Clwyd: The Prime Minister has stressed the importance of ensuring stability beyond the borders of Europe. Were there any discussions about Burma because, obviously, the UN envoy, Mr. Gambari, has failed in his mission to bring about stability and progress there? If the Prime Minister had no opportunity for discussions on this occasion, will he use the meeting with Mr. Sarkozy later in the week to discuss that matter?

Gordon Brown: My right hon. Friend is right that Burma is an issue on which we have common cause with many people in the rest of Europe and, indeed, in the rest of the world. Mr. Gambari has just finished his visits to Burma. It is important that we recognise that the Burmese regime's proposals for a referendum and elections that would exclude Aung San Suu Kyi are totally unacceptable. She should be released from house arrest immediately. Democratic elections should happen, and there should be reconciliation to bring the forces in the country together. I will continue to press that cause with my European colleagues.

Andrew MacKay: Why did the Prime Minister not answer the question about the future of Peter Mandelson as our European Commissioner? Surely he should be putting his right hon. Friend the Member for Leicester, West (Ms Hewitt) out of her misery.

Gordon Brown: Because it was not discussed at the European Council.

Nigel Griffiths: Does my right hon. Friend accept that it was important that he achieved success on getting the Council to consider a reduction in VAT on insulation materials? Will he go further and press the Heads of Government in Europe not only to achieve the target of a 60 per cent. reduction in CO2 emissions by 2050, but to go beyond that towards 80 per cent.?

Gordon Brown: My hon. Friend is absolutely right that the whole of Europe should consider whether a more ambitious target than a 60 per cent. reduction by 2050 is not only necessary, but desirable and something that we should work for as part of the Bali negotiations that will be held in Copenhagen a year from now. I agree that it is important that we look at that, which is why we are asking our own Committee on Climate Change to report on it. I believe that other countries are ready to follow suit and that a common European policy is possible on this, as on other matters. May I say that it is no good for Conservative Members to call for environmental co-operation in Europe if they are about to renegotiate the whole of the treaty in Europe?

Peter Tapsell: While we are on the subject of European co-operation, did the Prime Minister ask the other 26 Heads of Government at the European Council why none of them is prepared to send fighting troops to support our Army in the Helmand province of Afghanistan?

Gordon Brown: There are 43 countries involved in Afghanistan. Different countries are making different contributions in different ways. This will be a matter for discussion at the NATO summit in Bucharest, where other countries will be asked to share the burden in Afghanistan in terms of both equipment and troops. The specific location of troops will be a matter for discussion among the different partners in the coalition and we will reach agreement in due course. People ought to remember that, contrary to what was said at the time, 40 countries and more have joined the coalition on Afghanistan because they know that Afghanistan is the front line against the Taliban.

Keith Vaz: I welcome the Prime Minister's statement and refer him to paragraph 5 of the conclusions, in which member states are invited to strengthen the involvement of stakeholders in the Lisbon process. Will he tell the House how he intends to make sure that that happens, and that we will stick to the benchmarks that were originally suggested by the Lisbon process?

Gordon Brown: A range of discussions is taking place with all the social partners on all the issues related to Lisbon, and I know that industrialists and business groups have been called in to consider what the next stage of the Lisbon process might involve. I believe that we should now also consider the post-Lisbon process, so that we can think about how universities and skills can be part of the agenda for the future. A better competition policy may be part of the agenda as well. On all those matters, we will consult and work with not only all 26 of our colleagues in Europe but the various stakeholders who are concerned about the way in which the European economy develops.

Charles Kennedy: I agree with the Prime Minister that it makes absolute sense for this country to be fully involved with Europe on environmental policy, and for Europe to be the most important mediator in the presentation of a greener agenda. The EU can achieve much more than any nation state can achieve on its own. Will the Prime Minister emphasise that such an approach would be gravely undermined if this country were to adopt the sheer folly of a process leading to a policy of effective disengagement at European level?
	May I draw attention particularly to the Prime Minister's comment about the strengthening of energy security through a policy that takes a collective approach to third-country producers, notably Russia? Will he flesh out the discussions that took place a few days ago on that specific issue, which is a cause of growing concern throughout Europe?

Gordon Brown: There was a discussion about energy security and relationships with Russia, which is indeed a serious matter. Although it should not prevent us from trying to secure a partnership agreement with Russia, we should be absolutely clear about where our strategic interests lie, and there is merit in Europe coming together to present a united front in this regard.
	The right hon. Gentleman is also right to say that we would be in danger of not being able to make progress on the environment or on other issues if we were again to become isolated in Europe. I repeat that not one other country proposes a referendum on the European Union treaty—[Hon. Members: "Ireland!"]—apart from Ireland, and not one Government of the 27 opposes the treaty, while this Conservative party in this House opposes it. I understand that the only parties that support the Conservative position on the referendum are the Dutch Party for the Animals, the French Hunting, Fishing, Nature, Tradition party, Sinn Fein, and a variety of Trotskyists. Moreover, the Prime Minister of the Czech Republic—I repeat, the Czech Republic—made it absolutely clear not only that he would be isolated in Europe if he opposed the treaty, but that he was totally against the Conservative position on a referendum. In other words, the Conservatives have no allies in Europe.

Chris Bryant: The Prime Minister rightly referred to the need to co-ordinate energy security across Europe, but, if the climate change scientists are right, it seems likely that in the next few years lack of access to drinking water in north Africa will lead to dramatic changes in patterns of migration into Europe. In the past, that danger has tended to interest only the Mediterranean members of the European Union. Does the Prime Minister agree that it is now vital that the whole European Union take it seriously?

Gordon Brown: It is true that problems in Africa, whether they involve water shortages, lack of economic development, poverty, disease or migration, can directly affect the whole of Europe. That is why it is important that we have strong relationships with the African Union, and why the proposed union of the Mediterranean—which will involve 27 countries in Europe as well as Mediterranean countries bordering Europe—is such an important development. One of the issues that will be discussed is what help we can give African countries to develop not just their water supply but their infrastructure, so that they can trade with the rest of Europe.

Hywel Williams: The whole House will welcome the target of a 20 per cent. reduction in emissions by 2020, but which figure will the Prime Minister use in referring to the United Kingdom's contribution? Will he use the figure that is often quoted to the United Nations, or the figure in the report published today by the National Audit Office, which is some 12 per cent. higher?

Gordon Brown: It is predicted that greenhouse gas emissions in 2010 will be 23.6 per cent. lower than they were in 1990. The goal is to reduce carbon dioxide emissions to 20 per cent. below 1990 levels as well, and that is obviously part of the Government's objective. We are now considering the targets for 2020 and 2050.

David Chaytor: One of the great advantages of our membership of the European Union is the opportunity it provides to young people to work, study and travel freely across the EU. In the context of the post-Lisbon agenda, the review of human capital and skills and the role of universities, will my right hon. Friend look particularly carefully at the difficulties that we have in encouraging our young people to take advantage of the financial assistance schemes that are available to enable them to study abroad? British young people seem more reluctant to study abroad than young people in similar EU countries. Will he look at that carefully?

Gordon Brown: The Minister for Europe is here, and he draws my attention to the Erasmus scheme and other schemes that make it possible for people to study in the rest of Europe. We will certainly look at that matter. Co-operation between universities—and, indeed, between all institutions of education—will be very important. We must do everything in our power to deepen those collaborations.

David Heathcoat-Amory: When he was Chancellor of the Exchequer, the Prime Minister was critical of EU structural funding and the waste of that funding and of industrial expenditure. He said that
	"there is no better place to start than by bringing regional policy back to Britain".
	If that is still his view, what progress has he made in persuading other member states of that?

Gordon Brown: I am grateful to the right hon. Gentleman for raising that matter, because we have made reforms in European Union expenditure. That means that more of the resources are going to the poorest countries, which was the objective of the proposals that I put forward. I wanted more resources to go to the poorest countries in the rest of Europe and I wanted member states such as us to be able to carry out our own regional policy. That is why we have advocated changes in the state aid rules, and why, for example, on venture capital, we have made progress exactly in that area.

Fiona Mactaggart: I welcome the decisions in the European Council about financial market transparency and today's boost to the liquidity of financial institutions by the Bank of England, but given that irresponsible lending by those institutions has created real risks for home owners, will the Prime Minister initiate discussions about how to keep people on the home ownership ladder? We have many excellent schemes to get people on the first rung, but existing home owners are at risk of losing their homes because of bad lending. What can he do to help them?

Gordon Brown: One of the announcements that I made during the statement was that the Government are creating a new group to look at mortgage markets, and that will cover some of the questions that my hon. Friend raises. I agree that it is important at these times that we do everything we can to help those who are finding it difficult to pay their mortgages. However, she will note that the rate of people losing their homes and the rate of people who are in arrears on their mortgages are substantially lower than they were in the last world downturn in the early 1990s, when we had more home repossessions than at any time in our history.

Edward Garnier: As a director of the Great Britain-China Centre, a body partly funded by the Foreign Office, I was pleased to note in the Prime Minister's statement that he discussed a comprehensive strategy to strengthen the EU's economic relations with China, but I found his response to my right hon. Friend the Member for Witney (Mr. Cameron) about the influence that the EU should have on China in relation to Tibet somewhat thin. Will the Prime Minister provide us with some practical examples of what his Government will do in the next few days in that regard?

Gordon Brown: We have made our views known. While there was a discussion among Foreign Ministers about Tibet, it was not at the full European Council. Information was very sketchy on Thursday and Friday about what was happening in Tibet. It is only recently that we have become more aware of the problems that have arisen there. We have made our views known to the Chinese authorities. The Foreign Secretary is in touch with the Foreign Minister of China. We are calling for restraint and we believe that the way forward is a dialogue between the different parties. The hon. and learned Gentleman may know that we have been part of a human rights dialogue with China whereby there were visits to Tibet recently to look at conditions there, so we keep everything in that area under review and we are calling for restraint, for an end to violence and for dialogue between the parties involved.

Bob Spink: May I ask the Prime Minister what was agreed at the Council to get better control of EU spending and budgets, so that we do not see a 14th successive failure to get the accounts signed off by the auditors because of major problems in each of the key spending areas?

Gordon Brown: The hon. Gentleman is right in that we have been pressing for better accountancy procedures in relation to that, but he should betray to us the true nature of his inquiry: he wants Britain out of the European Union altogether.

Crispin Blunt: The very first line of the presidency conclusions from the summit are:
	"The fundamentals of the European Union economy remain sound: public deficits have been more than halved since 2005 and public debt has also declined".
	As by 2005 the Prime Minister had been in charge of the economy for eight years, will he explain why in the ensuing period the United Kingdom made such a significant negative contribution to the wider EU position?

Gordon Brown: When we came to power, debt was 44 per cent. of GDP, but it is now 38 per cent.; it is billions of pounds less than it was. We should not take any lectures from the party that caused the recession of the early '90s.

Peter Bone: Will the Prime Minister meet the Dalai Lama? A simple yes or no will do.

Gordon Brown: As I have said, the priority at present is to deal with the issues in Tibet and to make our representations to the Chinese Government. We will make any further announcements later.

Andrew Robathan: While the Prime Minister was chatting—convivially, I am sure—with his fellow European leaders in Brussels, did any of them congratulate him on pushing the Lisbon treaty through this House, even though that did, of course, involve his breaking his solemn promise on a referendum, contrary to the wishes of the British people?

Gordon Brown: When it was a constitutional treaty, nine Governments in Europe said there should be a referendum. As it is no longer a constitutional treaty, only one Government—the Irish, who are legally obliged to do so—are having a referendum. This has been through constitutional courts in Denmark and Holland, which agreed that this is not a constitutional treaty. In fact, the first words of the Brussels declaration are that the constitutional concept has been abandoned. The Conservative party would do better to follow us in negotiating better living standards and better deals for the British people than to try to renegotiate past treaties, which is clearly what it will spend all its time doing.

Bernard Jenkin: Does the Prime Minister recall that when the Lisbon agenda 2000 was first launched, it promised 3 per cent. annual growth in the European Union until 2010 and that red tape would be cut? The then Prime Minister said that it
	"marks a sea change in European economic thinking...away from heavy-handed intervention and regulation".—[ Official Report, 27 March 2000; Vol. 347, c. 21.]
	However, the European Commission itself now accepts that even though the single market increases European GDP by €225 billion, the burden of European regulation is €600 billion. Is that why the Lisbon agenda has to be relaunched time and again with the words:
	"Launching the new cycle of the renewed Lisbon strategy"?

Gordon Brown: l We have been making proposals to cut red tape in Europe during our presidency and in recent presidencies. The hon. Gentleman misunderstands the success of the Lisbon process: 10 million new jobs have been created in the EU as a result of it. He should tell us the true nature of his inquiry about Europe. He wants a referendum to oppose the amending treaty. He wants that even if it is ratified. He would force renegotiation of our membership of the EU. No country in Europe supports that, and he would be totally isolated.

Tony Baldry: The promise of a discussion of the millennium development goals at the June Council sounds somewhat weak. Will the Prime Minister undertake that between now and June, UKREP—the United Kingdom Representative Office—and No. 10 will work with colleagues elsewhere in the EU to try to ensure that at the June Council meeting a process is put in place to implement the MDGs by 2015 and that there is not just further discussion, but that some decisions are made about a process to implement them by then?

Gordon Brown: I am grateful for that question from the hon. Gentleman, who used to be the Chairman of the International Development Committee. We have called a conference with business leaders and others in May to look at how we can make progress on the MDGs and get a wider coalition of business, voluntary groups, foundations, charities and faith groups, as well as Governments, to pursue them. In June, this matter will be discussed in detail at the European Council as a report is being prepared already by Mr. Barroso, President of the Commission, about the progress that has been made and the progress that has still to be made. That will lead through to September, when there will be a special session of the UN—called by the Secretary-General—to look at what we must do next to achieve the MDGs. All Members should recognise that Europe leads the world: it is the biggest contributor to aid. It has done more than any other continent, but we want to do still more in the future. It is only possible for us to work successfully if we continue to work together. That demands a high level of co-operation in Europe, which I hope all Members will support.

Nigel Evans: The Prime Minister spoke about Russia's important role in energy security and made particular reference to Ukraine. Russia also has a very important role to play with its allies in Serbia in connection with the future security and stability of Kosovo. Has the Prime Minister yet managed to speak to President-elect Medvedev, and when does he expect to meet him face to face to discuss the important role that Russia has to play in the future of Europe?

Gordon Brown: As far as Kosovo is concerned, the violence that is happening now is most regrettable. I hope that the withdrawal of some of the UN forces can be avoided. It is very important to recognise that the policy of supervised independence in Kosovo means that there is a role for all minorities in that country. I am pleased that a large number of countries have now recognised the new Kosovo. Serbia is guaranteed a European future if, of course, it continues to observe democratic rights, which it is doing. I understand its frustrations about what has happened in Kosovo, but it is important that it recognises its responsibilities to the rest of Europe.
	The hon. Gentleman knows perfectly well the difficulties in our relationship with Russia that have arisen from what happened in London, where we had an assassination, and, at the same time, as a result of the treatment of the British Council, but we want good relations with Russia. We support a partnership agreement between the European Union and Russia, and we will continue to pursue these objectives.

Tobias Ellwood: Following the question from my hon. Friend the Member for Wellingborough (Mr. Bone), does the Prime Minister have any plans, separate from those of the EU, to meet the Dalai Lama?

Gordon Brown: I have made it clear that we are concerned about recent events in Tibet; we have made our view known. We have called for restraint. We believe that there should be a dialogue between the parties. That is the most important thing at the moment, and any further announcements or any further decisions can come later.

Mark Pritchard: Given that the Prime Minister seems reluctant to meet the Dalai Lama, will he confirm that he will at least have the courtesy to have a conversation on the telephone with him?

Gordon Brown: I have made my views known. I repeat: this was not discussed at the European Council. A statement is being made by European Union Foreign Ministers this afternoon, and I believe that that will show the unity of Europe in expressing concern about the situation.

Robert Goodwill: Following the Prime Minister's reference to Czechoslovakia—that far-away place of which he obviously knows little—do we now have evidence that he has been receiving foreign affairs briefing from the President of the United States?

Gordon Brown: I talk regularly to all my colleagues in Europe, and I made it absolutely clear when I was talking about the Czech Forum that I was talking about the Czech Republic.

Nail Bars and Special Treatment Premises (Regulation)

Phyllis Starkey: I beg to move,
	That leave be given to bring in a Bill to make provision for the licensing of nail bars and premises where tattooing, cosmetic piercing and other prescribed treatments are carried out; and for connected purposes.
	A constituent of mine first drew my attention to nail bars and the potential problems posed by what one might describe as the bargain-basement end of the market. My constituent, who runs a reputable nail bar in central Milton Keynes, became very concerned by the damage that had been done to the nails of some of her customers by other, less reputable establishments. Since I first raised this issue in the House on 15 November 2007, I have received feedback from across the UK showing that this is a widespread problem—a point reflected in the wide geographical spread of the sponsors of this Bill.
	It might help Members who are not familiar with the nail bar business if I briefly describe what nail bars are and the procedures they use. Nail bars are a relatively recent import from the US. They are a part of the beauty industry, and offer artificial nail extensions that can then be painted or decorated. In reputable nail bars with properly qualified nail technicians, nail extensions are created from mixing a polymer powder with a polymerising agent called ethyl methacrylate, or EMA. The resulting nail extension is flexible and easily attached to the natural nail. Unfortunately, the expansion of nail bars has led to a rise in the number using unqualified technicians and using an alternative polymerising agent called methyl methacrylate, or MMA. The agent is banned in nail bars in the United States, Australia and New Zealand, but there is no such ban in this country. The attractions of MMA to the operative is that it is much cheaper than EMA, at between a third and a sixth of the price, and that it forms the extensions more quickly, enabling non-standard nail bars to undercut the prices of the more reputable businesses.
	The customer might not be aware until it is too late that MMA has serious disadvantages, however. The nail extension is much more rigid and does not adhere well to the natural nail, so the natural nail has to be drilled or etched with an electric file to help adhesion. Unlike EMA, MMA polymers continue to polymerise once attached, and the MMA penetrates and damages the nail bed. Long-term use of MMA is associated with respiratory problems and serious allergic skin reactions, and the staff using it usually protect themselves, including from the dust generated by the electric filing, by wearing gloves and masks. That ought to suggest to the customer that the use of MMA is not risk free.
	The other consequence for the customer of using MMA is that the extensions are so rigid and so tightly stuck to the nail that if they get caught or jammed the natural nail can be ripped off. Pain is caused by the drilling, and the permanent ridging and damage to the natural nail and nail bed can take a long time to grow out. To compound matters, MMA extensions are much more difficult to remove than those formed with EMA.  [Interruption.] I can see that I am catching the attention of the hon. Member for Putney (Justine Greening). Several of the nail bar technicians who have contacted me have shown me graphic pictures of the damage that MMA has caused to the nails of patrons of sub-standard nail bars.
	One way to deal with the problem is to improve awareness among the public, particularly young girls and women, of the damage caused by MMA and the importance of ensuring that, before anyone tampers with their nails, they check that the person is properly qualified. I know of one scheme that is to be launched shortly, which will allow potential customers to check a website for reputable nail bars in their area. I very much welcome that, but simply improving public awareness will not stop the continued spread of non-standard nail bars. Such bars not only risk affecting their customers but undercut the credibility of the whole sector and those who try to provide a high-quality service.
	London councils within the M25 already have the power under part II of the London Local Authorities Act 1991—"Special treatment premises"—to license nail bars, and thus in principle to impose standards, including the appropriate level of qualification for staff and restrictions on the chemicals that can be used. However, the contacts that I have had suggest that even in London, where licensing powers exist, council licensing officers may be focusing on hygiene—that is important, because hepatitis C can be spread through the use of electric drills on nails—and may not be aware of the specific risks of MMA or of the need to check the qualifications of staff.
	Outside London, the situation is even more confused. Nail bars do not come within the scope of the Local Government (Miscellaneous Provisions) Act 1982, and therefore cannot be subject to licensing. Environmental health staff can give advice on the use of chemicals, but their only enforcement powers come through the Health and Safety at Work etc. Act 1974, which is relevant to employees, not to customers. Trading standards can respond to customer complaints, but most customers do not realise that the pain and damage that they experience because of MMA are not just a normal part of the process.
	Although the problem of MMA seems well known in the industry, it seems to be below the radar of public authorities. In response to earlier comments that I have made in the House, the Department of Health has told me that it has made no assessment of the public health risk of MMA in nail bars, and the Health Protection Agency has no record of ill effects to customers or employees in the last three years. The HSE's health and safety laboratory is apparently reviewing health issues for technicians in nail bars, but it seems that, once again, the effect on the customer is being ignored—perhaps because damaged nail beds are not regarded as a terribly serious public health issue.
	That is not satisfactory. Most of the customers of non-standard nail bars are likely to be young women and girls on low incomes, for whom the low prices that those businesses can charge make nail extensions seem much more accessible. Customers need to be protected from unscrupulous operators, which is why I propose that the powers already enjoyed by London councils to license nail bars and a number of other similar businesses should be extended to all local authorities across England.
	The chief environmental health officer at my local council in Milton Keynes tells me that following an inspection, tattooists, for example, like to have a document from the local authority as it drives the cowboy operators out of business. It helps to bring in customers if businesses can advertise that they are registered with the local authority. Among qualified nail technicians, there is also strong support for regulation. At present, an astonishing 85 per cent. of nail technicians do not have NVQ level 3 qualifications, and have no incentive to invest in the training as it gives them no competitive advantage.
	A proper licensing regime across England would protect customers, drive up standards and reward those businesses investing in training. It would mean that girls and young women could use nail bars and be confident that they would suffer no ill-effects.
	 Question put and agreed to.
	Bill ordered to be brought in by Dr. Phyllis Starkey, Ms Celia Barlow, Mr. Clive Betts, Dr. Roberta Blackman-Woods, Richard Burden, Ms Sally Keeble, Fiona Mactaggart, Chris McCafferty, Kerry McCarthy, Martin Salter, Anne Snelgrove and Margaret Moran.

Nail Bars and Special Treatment Premises (regulation)

Dr. Phyllis Starkey accordingly presented a Bill to make provision for the licensing of nail bars and premises where tattooing, cosmetic piercing and other prescribed treatments are carried out; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 25 April, and to be printed [Bill 87].

Orders of the Day

Ways and Means

Order read for resuming adjourned debate on Question [12 March.]

AMENDMENT OF THE LAW

Motion made and Questions proposed,
	(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
	(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—
	(a) for zero-rating or exempting a supply, acquisition or importation,
	(b) for refunding an amount of tax,
	(c) for any relief, other than a relief that—
	(i) so far as it is applicable to goods, applies to goods of every description, and
	(ii) so far as it is applicable to services, applies to services of every description. —[Mr. Darling.]
	 Question again proposed.

Budget Resolutions and Economic Situation

Hilary Benn: I welcome the opportunity afforded by the Budget debate to discuss the challenge that we face as a country and as a world to move from our historical reliance on a carbon-intensive way of living towards a sustainable, low-carbon economy. Wherever we look, whatever goods and services we buy, whatever things we do, all of them have a carbon footprint. Carbon is currently central to our way of life, but we need that to change if emissions are to decline in the way that is necessary.
	The UK has made progress. We have broken the link between economic growth and growth in carbon emissions. The economy has grown by about a quarter in real terms in the last 10 years, whereas greenhouse gas emissions have fallen by 7.6 per cent. But for the action that has been taken, greenhouse gas emissions would now be about 15 per cent. higher than they were in 1990; instead, we will more than meet our Kyoto target. However, as the facts of climate change become more stark, we will need to be even more radical, and the Climate Change Bill will enable us to do just that. For the first time anywhere in the world, a legal requirement will be placed on the Government of the day to ensure that the country's carbon account does not exceed its carbon budgets. Budgets will be set in legislation.

Peter Ainsworth: I am extremely grateful to the Secretary of State for giving way so early in his speech. He has just mentioned the carbon budgets, but what about the Budget? Can he give us some idea of the total amount of carbon reduction that he expects as a result of the measures announced in the Chancellor's recent Budget?

Hilary Benn: If the hon. Gentleman will bear with me, I shall give some of those figures in the course of my speech. The facts, however, are that the independent climate change committee, the shadow version of which met for the first time last week, will of course propose the first of the three carbon budgets at the end of this year. At the same time, it will advise the Government, as my right hon. Friend the Chancellor outlined last week, on whether we should go further than the 60 per cent. reduction by 2050 and strengthen it to an 80 per cent. reduction.
	Our task now is to ensure that the UK meets those budgets. That will require a contribution from every business and every household in the land as well as co-ordinated efforts across government. That is why the Chancellor announced last week that the first three carbon budgets will be set alongside the Budget next year. That is a sign of the Government's determination to put reducing carbon dioxide emissions at the centre of policy making and of the economy.

Steve Webb: The Secretary of State will be well aware that measuring the right thing is critical. He will know that the narrow measure used for Kyoto tells one story while the broader measure in the nation's environment accounts, produced by the Office for National Statistics, tells a different story. Does he accept that on that basis, according to a comprehensive measure, CO2 emissions have not fallen at all since 1990 and have increased since 1997? Is that not a cause for grave concern?

Hilary Benn: According to the measure that we use to report to the United Nations, because that is the way it asks for the figures to be submitted, it is clear that UK emissions of greenhouse gases have fallen by 15.4 per cent. and emissions of CO2 by 6.4 per cent. We also report to the UN figures on emissions from aviation and shipping, which are included in a footnote when they are published. As the hon. Gentleman will be aware, the ONS does its own estimate in the environmental accounts. That calculates emissions from flights in a different way and also includes estimates resulting from UK citizens who live and work in other countries. It clearly would not make sense for those figures to be included in the UK totals that are reported to the UN framework convention on climate change. The way in which we report fulfils the requirement that the UN places on us, and we are making the progress that has been set out. Aviation and shipping are issues that we need to deal with internationally.
	The changes that we are putting in place mean that 12 months from now—only a short time—meeting our carbon budgets will be on an equal footing with meeting our financial budgets. The House will, I am sure, appreciate that that is a profound change in the way in which we do things. As the first of its kind in the world, the Climate Change Bill is also a sign of the UK's international commitment. As the House will be aware, the world agreed in Bali just before Christmas to start negotiations on a new global climate deal to take us beyond 2012.
	Getting the United States of America, Australia, China and India into formal negotiations on a new deal is a huge step forward, but the hard part starts now. We have to get every country in the world to play its part. That is why leadership in Europe is so important. As we have just heard from my right hon. Friend the Prime Minister, the European Council has reaffirmed its commitment to cut greenhouse gas emissions in Europe by 20 per cent. by 2020, with legislation next year. Part of the agreement is that Europe will go further, with a 30 per cent. reduction by 2020, if an international agreement is reached.
	I am sure that the House will recognise that international leadership by any country is not enough. We can bring to the negotiating table only that which we can contribute at home. That means that the UK must take bold action both to make possible progress in the negotiations and to reduce our carbon footprint.
	Our approach to reducing emissions across the economy—in our homes, our businesses, the public sector, transport and energy supply—is based on three principles. The first is pricing carbon, through a trading tax or through regulation, to get the most cost-effective reduction. The second is encouraging innovation in low-carbon technologies, and the third is removing barriers to action, including encouraging long-term behavioural change. The Budget does those things by setting out the steps that we intend to take in each of those areas. Each of us as individuals has a role to play in tackling climate change.

Nick Hurd: Before the Secretary of State gets to the meat of the three principles, may I point out that both he and the Chancellor in his Budget have been entirely silent about using taxpayers' money to buy carbon credits in overseas markets to allow us to fulfil our ambitious carbon targets? The National Audit Office estimates that the cost to British taxpayers will be about £5 billion by 2020; what is the Government's estimate?

Hilary Benn: It will depend on the decision that the Government take about the use of international credits. As the hon. Gentleman will be aware, the Bill provides for the Committee on Climate Change to give us advice on the use of international credits. The Government will have to look at that advice in due course, when we receive it. In another place, there was a lively debate about the use of international credits, and we will no doubt have such a debate in the House when the Bill comes before us. As I am sure the hon. Gentleman accepts, it is entirely legitimate to make progress partly by using international credits because in the end, from the world's point of view, it does not matter where emissions are saved, as long as they are saved. That is why the Government's view is that carbon trading and the purchase of credit have an important role to play.
	Some 40 per cent. of emissions are the result of choices that we make as individuals, so the Government want to help people to make low-carbon choices, and to ensure that our homes and products are working towards low-carbon living. That is why we launched a big public awareness campaign last year to encourage people to act on CO2. I saw that campaign working for myself in Leeds last Friday. The online carbon calculator has already been visited by about 800,000 people. It is practical and simple; it helps us as individuals to understand what our own carbon emissions are, and gives practical ideas on how to reduce our carbon footprint.
	Through the carbon emissions reduction target we have obliged energy companies to double the amount of energy-saving measures that they install in people's homes from this April, which means that they will reach up to 8 million households. That will help to save 4 million tonnes of CO2 a year by 2011, and deliver a typical saving of £90 on fuel bills. The green homes service, which is to be launched next month, will provide people with comprehensive advice on how they can reduce their carbon footprint, and will connect people with the offers that are available from energy companies and with other support. We will put £26 million into that service.
	We will become the first country in Europe to phase out high-energy light bulbs. That is to be completed by 2011 and will save up to 5 million tonnes of CO2 a year that would otherwise be produced through UK electricity generation. We have introduced regulations to improve the energy efficiency of new homes. Today's buildings are 40 per cent. more energy efficient than those built before 2002, and 70 per cent. more efficient than those built before 1990. In under a decade, all new homes will be zero-carbon. We will set out the definition of a zero-carbon home for the purposes of the 2016 target by the end of 2008, following a consultation in the summer. The Government are determined to enable business and the public sector to play their part in a low-carbon Britain.

Henry Bellingham: Has the Secretary of State looked any further into giving householders an incentive, such as a reduction in council tax, for embarking on microgeneration—for example, for installing a small windmill, a ground source heat pump or solar panels?

Hilary Benn: As the hon. Gentleman will no doubt be aware, we are considering the role that feed-in tariffs could play in ensuring that people do the things that he sets out. It is clear that we need to find more ways to incentivise and encourage that kind of investment. The experience of other European countries that have adopted feed-in tariffs for microgeneration is that it brings forward investment: the renewables obligation certificates work better for large-scale generation.
	I wish to mention the climate change levy, as it was opposed by the Opposition. It is forecast to reduce emissions by 12.8 million tonnes a year by 2010, and the climate change agreement is forecast to reduce emissions by 7 million tonnes a year by 2010. The carbon reduction commitment will cover the non-intensive business sector. Up to 5,000 large public sector organisations and businesses, such as banks and supermarkets, will participate in the scheme. It will save at least 4 million tonnes of CO2 per year by 2020 and will save the organisations involved some £755 million through lower energy bills.
	I believe in the importance of Government leadership, and because of that all Government Departments will participate in the scheme. However, we need to go further.

Kelvin Hopkins: rose—

John Redwood: rose—

Hilary Benn: I give way to my hon. Friend.

Kelvin Hopkins: My right hon. Friend referred to feed-in tariffs, which we welcome—they cover revenue costs and help with day-to-day costs. However, the capital cost of installing solar panels, for example, is very high. There was a Government scheme for 50 per cent. grants; if that were available generally, I am sure that solar panels would rapidly be installed across the whole country.

Hilary Benn: Following the consultation that the Government are going to undertake on them, feed-in tariffs would encourage people to invest and encourage others to lend money for people to invest, by providing the income stream for the years ahead. As I have said before, I think that way of doing things is better than the Government giving out grants to achieve the same effect. The tariffs would incentivise the system; that is why the Secretary of State for Business, Enterprise and Regulatory Reform has announced that we will consider them.
	However, we need to go further still. That is why the Chancellor announced in the Budget our aim that all new non-domestic buildings be zero-carbon from 2019, with the public sector leading the way. It is already the Government's aim for all new schools to be zero-carbon from 2016; we want all new public sector buildings to be zero-carbon from 2018 and we will establish a taskforce to advise on the timetable and on how to reduce carbon emissions in the intervening period. To help public sector bodies in England, including local authorities and hospitals, I have already announced an extra £30 million over three years in interest-free loans for energy-efficiency projects through the Salix scheme.
	Cars and lorries are the second largest source of CO2 emissions in the UK. Changing the transport sector to meet the demands of business and personal travel while reducing carbon emissions is clearly important. That is why the Government have provided sustained year-on-year investment in public transport. One consequence has been that passenger numbers on our railways are up—from 735 million passengers in 1994-95 to 1.16 billion in 2006-07. That figure is as high as it has been since the late 1950s to early 1960s.
	We are investing in and promoting new clean technologies for transport, including a £20 million fund to help public sector organisations to buy environmentally friendly vehicles. The House will have seen the King review, published at the same time as the Budget. It considers even more radical steps to decarbonise transport, especially cars, in the next 25 years. In response, the Government have made clear their support for an EU-wide target for vehicle manufacturers to reduce average CO2 from new cars to 100 g per kilometre by 2020. That would be on top of the provision for 130 g of CO2 per kilometre currently being discussed in Europe. Furthermore, the Budget outlined a restructuring of vehicle excise duty to encourage motorists to purchase fuel-efficient vehicles.

Geoffrey Cox: Can the Secretary of State suggest how a rural farmer or country dweller will be able to do without his Land Rover or other 4x4 vehicle and escape the penalty that the Government are imposing on him by way of increased vehicle excise duty?

Hilary Benn: From memory, I think that the best-in-class 4x4 has an emissions figure of 151 g of CO2 per kilometre. If the hon. and learned Gentleman looks at the new table for vehicle excise duty, he will see that that figure is well below some of the others. The aim of the change to vehicle excise duty is to encourage people purchasing new vehicles to choose the most fuel-efficient and least polluting in class. That is why individuals who buy the most polluting, fuel-hungry vehicles will have to pay £950 in the first year, 2010-11, which is more than double the current rate, while those who buy the cleanest—those emitting 130 g of CO2 or less per kilometre—will pay nothing.
	Recognising that there is a genuine debate about the sustainability of biofuels, we announced in the Budget a switch in support from the existing biofuels subsidy towards the renewable transport fuels obligation, which contains sustainability criteria. That is why my right hon. Friend the Secretary of State for Transport and I have asked Ed Gallagher, who chairs the Renewable Fuels Agency, to lead a study of the wider economic and environmental impacts of biofuel production, including the impact on fuel prices. Together with the changes to company car taxation, all these steps are sending a clear signal that choosing the cleanest and most fuel-efficient vehicle is, in every sense, the sensible thing to do.

Bill Wiggin: How many family vehicles has the Secretary of State been advised that the car companies are intending to produce that will fit within the low-carbon bands?

Hilary Benn: I will be happy to write to the hon. Gentleman with a list of the best in class for all the different categories showing what vehicle can be purchased and what are the CO2 emissions in grams per kilometre for those vehicles. The change is intended, first, to incentivise the purchase of low-emission vehicles and, secondly, to incentivise the manufacturers to invest more effort in producing more vehicles that have lower emissions. That is one of the changes that must be made if we are to make progress in meeting the aims of the Budget. Although I understand the Opposition's wish to raise these points, in the end this is about making choices. It is all very well to talk about the need for green taxation, but when measures come along to create an incentive structure for vehicles in order to lead to a change, the House should support that.

Peter Ainsworth: I am sorry to return to the same point, but if the Secretary of State cannot give us a figure for the overall carbon reduction impacts of the Budget, can he give us just the figure for the changes to car taxation? If we are to be invited to support these measures, it is important to know what the impact is going to be.

Hilary Benn: The reduction relating to the change in car taxation is some 500,000 tonnes of CO2 a year; that is the figure that I have before me. Of course, what it is going to mean in reality will depend very much on the choices that individuals make. Road transport is only part of the picture. In the 2007 pre-Budget report, the Government announced that air passenger duty would be replaced with a per-plane rather than a per-passenger tax better to reflect the environmental costs of aviation, and we said that in order to strengthen the environmental signal through taxation we would increase the tax by 10 per cent. from 1 November 2010.

Peter Ainsworth: I may be able to help the Secretary of State out at this point. I think that he may have inadvertently misled the House. The figure of 500,000 tonnes of carbon reduction arises from the deferred increase in fuel duty, not from the changes to car taxation. I would be grateful if he could give us the figures for the latter.

Hilary Benn: The hon. Gentleman is absolutely right. I apologise for that mistake. The answer on vehicle excise duty will depend on the decisions that individuals take in making their purchases. It is therefore quite difficult to forecast what the changes will be, but the reduction as a result of fuel duty is indeed the figure that I gave the House a moment ago.
	Let me turn my attention to the energy sector. The UK has signed up to an EU-wide target for 20 per cent.—

Nick Hurd: rose—

Hilary Benn: If the hon. Gentleman will bear with me, I want to make a little progress, having been generous is giving way.
	The UK has signed up to an EU-wide target for 20 per cent. of energy production to come from renewable sources by 2020. In the summer, the Government will launch a full consultation on proposals for meeting the UK's share of the target. We will look at all options for doing so, from things such as the Severn barrage, which could meet 5 per cent. of the UK's electricity supply needs, to offshore wind—the UK is now the No. 1 location for such investment in the world and is forecast to overtake Denmark as the country with the most offshore wind generation capacity—to microgeneration, which we have just discussed, along with our commitment to consider feed-in tariffs in that area.
	The EU emissions trading scheme is at the heart of the plan of the UK and Europe to deal with climate change. It creates a price incentive for generators to reduce their emissions. To ensure that the EU ETS sends the strongest possible signal to the power sector, in phase 3 the UK will go to a system of 100 per cent. auctioning in the large electricity producers sector.

Stewart Hosie: On the issue of offshore wind generation, will the Government finally address the unfairness and imbalance in connectivity charges to the grid—the subsidy received in the south versus the massive cost to connect in the north-west of Scotland? We cannot gain from offshore wind capacity if the unfairness in the connectivity charge is not removed.

Hilary Benn: The fact that we are now the No. 1 location for investment, and that we will overtake Denmark as the country with the largest installed offshore wind capacity, shows that, despite the issue the hon. Gentleman raises, we are making progress in putting more wind capacity in place to meet our need for renewable energy in the years to come. No doubt the debate will continue about the most effective way to allow more capacity to come on stream. When one talks to renewable energy companies, one finds that they are most concerned about planning. That is a special case as far as onshore wind is concerned, but as the hon. Gentleman will be aware, the Government are taking steps to address that.
	We are introducing a wide range of low-carbon technologies as part of the £400 million domestic environmental transformation fund. The Carbon Trust technology programme will receive more than £90 million to introduce new energy technology, such as offshore wind, third-generation photovoltaic power, marine energy and biomass heating. During the next three years, the Government will provide about £10 million for a new anaerobic digestion demonstration programme.
	Carbon capture and storage will be vital if we are to deal with the problems facing the world, and another example of the UK taking the lead in the demonstration of technology on a commercial scale is the launch of a competition to design and build the world's first post-combustion CCS power station. We are currently the only European Union country committed to fund a commercial-scale CCS project, and we will shortly launch a consultation on what it would mean for a new coal-fired station to be capture-ready, and on whether all new fossil-fuel power stations should be required to demonstrate that they are capture-ready.

Gregory Barker: Is the Secretary of State not aware of the BP Abu Dhabi CCS project, which was announced at the world future energy summit in January? It will be up and running by 2012, when the Government's competition will barely be over.

Hilary Benn: I am indeed aware of that. I was referring to European Union countries building demonstration projects in the EU, and I said that we are the only EU country doing that in the EU. As the hon. Gentleman knows, we are also funding, alongside other countries, the near zero-emissions coal demonstration project—NZEC—in China. We have to demonstrate that post-combustion CCS works because we have to fit it in all existing coal-fired power stations and in those built during the months and years ahead owing to the thirst for energy in developing countries.

Nick Hurd: I attach the same importance to clean coal technology as the right hon. Gentleman, but will he clarify whether the Government intend to attach any carbon capture and storage conditions at all to the proposed coal-fired power station at Kingsnorth, and if not, why not?

Hilary Benn: My right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform will make that decision, which he will announce in due course.
	Recycling saves the equivalent of approximately 18 million tonnes of CO2 a year and our waste strategy, which was published last year, sets out how we can recycle or compost half of all household waste by 2020. As well as recycling, reducing our overall demand for scarce natural resources is essential if we are to meet the challenges that face the natural environment. A disposable society is not a sustainable society. That is why the 13 billion, free, single-use, plastic and other bags that are distributed in the UK each year are a symbol of a disposable society. There has been growing public concern about that symbol and the Government, using the Climate Change Bill, will legislate to require retailers to impose a charge if they do not take voluntary action.

Steve Webb: The Secretary of State has been generous in giving way. He briefly mentioned business recycling and then got on to carrier bags. Is the Department not cutting money to support organisations such as the Waste and Resources Action Programme and the National Industrial Symbiosis Programme, which help businesses to recycle? Is there not a disjunction between the right hon. Gentleman's rhetoric, with which we all agree, and the reality—the cuts that the Department is making?

Hilary Benn: No, there is no disjunction. We have put a considerable amount of money into several such organisations and we continue to fund them. However, we must deal with the issue of whether, when it is in the interests of business to reduce carbon emissions and improve recycling, it is right for the Government to continue to pay for free advice to be given to it. Is it not reasonable to ask business to begin to pay for some of that advice? I have made the decision that it is reasonable to ask business to contribute to the cost of getting advice. We have set our budget on the basis of that policy and I am clear in my mind that it is right.
	In addition to our changes to deal with plastic bags, landfill tax will increase by £8 a tonne from 1 April and by that amount each year until at least 2010-11. The aggregates levy ensures that the external costs associated with the exploitation of aggregates are reflected in the price. It will increase to £2 a tonne to maintain its environmental impact.
	I want to consider the impact of changes in fuel price on those who find it difficult to pay their bills. As the House knows, more than £20 billion has been spent on benefits and programmes since 2000 to help to remove people from fuel poverty. That has led to 4 million households being removed from fuel poverty since 1996—the figure is down from 6.5 million to around 2.5 million, although the rise in energy prices means that it is rising again. Further action to help to tackle fuel poverty and vulnerable groups is therefore needed.
	Energy companies spend approximately £50 million a year on social programmes and the Government want that figure to increase to at least £150 million a year. We will work with companies to achieve that, and legislate if necessary.

Alan Simpson: Will my right hon. Friend go back to the figures that he used? Does he accept that the current figure for the number of households back in fuel poverty is estimated to be 4 million, and that the challenge that faces us is that the numbers that the Government's Warm Front programme took out of fuel poverty are being overtaken by those thrown back into it, simply because of the scale and pace of rises in energy costs?

Hilary Benn: That is the case, as I just acknowledged, because of the substantial increase in the prices that energy companies charge and that consumers have to pay. That is why my right hon. Friend the Chancellor announced in the Budget his wish for energy companies' expenditure on helping vulnerable customers through their social programmes to increase. It is also why he drew attention to the fact that customers who use prepayment meters typically pay around £55 more on their energy bills than those who use standard credit and £144 more than those who pay by direct debt.

Harry Cohen: My right hon. Friend has been generous in giving way. A wish is not the same as a requirement for energy companies to put in that money for vulnerable households. What will the Government do to monitor the position? Will they introduce a requirement? It has been reported that there was an argument in the Cabinet about whether there should be a requirement. I would be interested to know the Secretary of State's position on that.

Hilary Benn: I will happily tell my hon. Friend what my view and the Government's view is. We think it is now time to tackle the issue and we are looking to Ofgem and the suppliers to bring forward proposals for treating prepayment meter customers more fairly. However—this is the answer to his question—if sufficient progress is not made by next winter, the Government are prepared to use statutory powers to reduce the differential between prepayment and other forms of payment.
	In the meantime, as my hon. Friend and the House will be aware, we are providing immediate help to pensioners who face pressures from higher energy bills this year, by raising the winter fuel payment for the over 60s from £200 to £250 and for the over 80s from £300 to £400. Some 9 million pensioner households will be better off as a result. I simply remind the House that before 1997 there was no winter fuel payment at all.

Patrick McLoughlin: Will the Secretary of State give way?

Hilary Benn: I am going to bring my remarks to a conclusion, as I have been very generous in giving way.
	One the reasons why today's debate is welcome is that it gives us the chance to discuss the change that is to come. In the rest of this century, debating and deciding on our carbon budget will be as important as doing so on traditional financial budgets, and arguably even more so. The measures that I have set out in my speech have shown the practical steps that the Government are taking to enable the country to reduce its carbon emissions. It is for that reason that we have a strong record on the environment; but I recognise, as does the House, that we will all need to do more to help build a low-carbon Britain. The Budget shows exactly how and why we are determined to do that.

Peter Ainsworth: I have to take issue with the Secretary of State's final sentence. He barely spoke about the Budget in his remarks and the Budget hardly deals with the pressing environment challenges that we face at all. On the other hand, I do not doubt for a moment his integrity and sincerity on such matters. My hon. Friend the Member for Bexhill and Battle (Gregory Barker) and I heard him speak at the Chemistry Club last week. He gave a passionate and committed speech about the environment and the importance of living within natural limits, which is a lesson that the whole of humanity has to learn. He said:
	"We are living beyond our means",
	which is true in respect of the environment, but unfortunately it is true of the Chancellor, too, in respect of the economy. That is one of the dilemmas that we face.
	The Budget was supposed to be the great green Budget. The headline in  The Guardian on 10 March ran "Darling plans greenest budget yet". We expected it, we wanted it and we were all prepared for it. Indeed, the Chancellor warmed us up for it last December, when he said:
	"Sustainability will be at the heart of the next Budget. This is not an optional extra, it is essential to all our futures."
	In his Budget speech, the Chancellor cranked up the excitement further, saying:
	"our greatest obligation to the future must be to tackle climate change."—[ Official Report, 12 March 2008; Vol. 473, c. 295.]
	I agree, so I was looking forward to the greenest Budget yet. We needed the greenest Budget yet, because carbon pollution in this country is higher than it was in 1997. On that most fundamental of measures, the Government have failed.
	To say that I was disappointed by the Budget is a huge understatement, but I was not alone in being disappointed. The director of Friends of the Earth said:
	"He has merely tinkered at the edges",
	continuing,
	"the overall package falls a long way short of what is required. We urgently need real political leadership on this issue".
	The executive director of Greenpeace said:
	"His measures have failed to match the scale of the challenge we face".
	Perhaps the headline from the Green Alliance summed it up best: "Green Budget? What Green Budget?"
	I am happy to take as my text for this debate the press release issued by the Department for Environment, Food and Rural Affairs on Budget day. It is headed "Benn welcomes Budget 2008" and sets out the Department's response to the measures announced by the Chancellor last Wednesday. I suspect that it was issued through gritted teeth. The opening paragraph of the press release appears to be have been drafted before the Department knew what was in the Budget, and reads:
	"The Chancellor today set out the 2008 Budget which includes measures to tackle climate change, the most serious and pressing environmental challenge the world faces. Setting out new policies to reduce emissions across all major sectors of the economy, this Budget will ensure the UK continues to lead the climate change agenda internationally while the government continues to take action to protect the UK's natural environment."
	There are no policies in the Budget to
	"reduce emissions across all major sectors of the economy".
	Or, if there are, I would be grateful if the Secretary of State could tell us what they are. If there had been any, he might have been able to tell us by how much he expected carbon emissions to be reduced as a result of the Budget measures, but he was unable to do so.
	The next paragraph of the press release has a faltering tone and conveys a sense of putting on a brave face. It states:
	"Following the Budget statement, Hilary Benn said: 'This Budget demonstrates how seriously the Government takes the environment, with clear incentives for action, for example the new vehicle excise duty bands and charges for plastic bags, and measures to reduce emissions, for example zero carbon new commercial buildings.'"
	I shall say more in a moment on the new vehicle excise duty bands, charges for plastic bags, and zero-carbon new commercial buildings, but let us first reflect on that list of highlights. It reveals just how pathetic the Chancellor's measures are in response to
	"the most serious and pressing environmental challenge the world faces".
	It contains only a car tax, a charge on plastic bags—perhaps—and a promise to do something about commercial property in 2019.
	Let us move on from the headlines to the nitty-gritty, such as it is. Most of it comprises familiar, heated-up re-announcements, or has been borrowed by Conservative party policy—we are always pleased when the Government do that—or will merely have a marginal impact on climate change. The press release continues:
	"The Green finance measures in the Budget include: Laying the ground work for the introduction of five-year carbon budgets".
	That is an achievement not of the Budget but of the Climate Change Bill, which was introduced only after a concerted campaign by green groups, the Conservative party, and other Opposition parties. We support the Climate Change Bill, and I am pleased to say that those in another place have introduced some important amendments, which I trust the Government will not seek to overturn when the Bill comes to our House.
	A report entitled "UK greenhouse gas emissions: measurement and reporting", published by the National Audit Office at the weekend, has thrown some worrying light on the way in which the Government measure the carbon that we produce. It seems that we might be using dodgy data. The NAO report raises profound questions about the credibility of the Government's approach to reducing carbon emissions, which threatens to send its climate change strategy off course. If the measurement of carbon and other greenhouse gases is flawed, the whole process of setting targets for cutting emissions is undermined.
	To make matters worse, there has been an extraordinary degree of ambiguity about the targets that the Government have set themselves. They repeatedly boast that the one target that they have met is the unambitious Kyoto target, but even that is now being called into question. It all depends on the system of measurement used. It is unclear whether the confusion is accidental or whether there has been a deliberate attempt to create wriggle room. The Lib Dem spokesman was right to draw attention to this earlier, and to point out that, on one basis of measurement, we have not reduced our greenhouse gas emissions at all since 1990. The existence of two quite separate carbon accounting systems would do credit to Enron.
	There is an urgent need to rationalise the reporting system, so as to make it coherent and consistent. The NAO report reveals not only that different Government Departments use different methods to measure their carbon emissions, but that it is possible, within Departments, for two separate systems to be used to make different points.
	It is all very well for the Chancellor to announce in the Budget that next year will see the establishment of the first carbon Budget, but he might also have pointed out that there is at present no true or fair means of validating it.

Hilary Benn: Will the hon. Gentleman confirm to the House that the figures that we report to the United Nations framework convention on climate change follow the guidelines that are set down by the intergovernmental panel on climate change, and that we do that in the way in which the panel has requested?

Peter Ainsworth: I accept that. However, this becomes more difficult when that method of measurement is applied to UK emissions, as aviation and shipping are excluded. As a result, it does not give a true and fair picture of our emissions. In the absence of reliable and honest reporting, nobody will have confidence in the system. In view of the seriousness of the issue, the Secretary of State should address it as a matter of urgency when he responds, as no doubt he will, to the National Audit Office report.
	Beyond the problems of accounting for domestic carbon emissions is the revelation that the Government are planning to allow up to half of our progress towards meeting our carbon reduction targets by 2020 to be met by buying our way out of the problem with overseas credits. No mention was made of that in the Budget and Ministers have not mentioned it at all. We now know, thanks to the NAO's work, that the Office for National Statistics does not have enough faith in the reporting standards of the overseas carbon credit market to include international credits in the official national statistics. Any problems with the accuracy of measuring our own domestic carbon pollution are magnified when we try to apply measurement on a global scale.
	I know that this may seem rather nerdy, but it is fundamental to the Government's credibility on the whole climate change agenda—an agenda that, in the words of the Chancellor, is "essential" to "all our futures". Do the Government plan to buy their way out of dealing with climate change; will they put a cap on the indulgences that we can buy from abroad; or have they instead a plan for a dynamic transformation of our country's economy towards low-carbon, prosperous, greener and safer industries that will be truly essential to all our futures and truly essential to the well-being of our children and grandchildren? It is essential if their carbon budgets are to have proper credibility that the Government act urgently to clear up the questions now being raised about dodgy data and the purchase of foreign indulgences.
	The next line in the DEFRA press release refers to
	"reform of car vehicle excise duty rates and bandings including the introduction of new bands from 2009 to reward drivers of the cleanest cars, and higher first year rates in 2010-11 to influence purchasing choices".
	We can agree that, in principle, it is better to influence choices at the point of purchase—at the point of choice—than to penalise people for decisions that they have already taken, but there is a world of difference between genuine green taxation and stealth taxation. It is a difference that the Government do not seem to get and, as a result, a difference that the public do not get either.
	As an Ipsos MORI report suggested last year,
	"the public appear far from convinced that measures announced under the banner of climate change are actually intended to benefit the environment...Trust is a key factor impacting on the ability of government to make the case to its electorate about any particular policy measure, and eco-taxation... suffers from the stigma of 'stealth' taxation".
	We need to shift the burden of tax away from good things such as families and work and on to bad things such as pollution, especially carbon pollution.
	The key point is not to raise the overall burden of taxation, so what does the Chancellor do in his Budget? He proposes increasing car taxes to generate an additional £735 million in revenues while the tax cut on low-carbon cars will give back to us £15 million. To put it another way, the Chancellor is raising 50 times more tax than he is cutting. In the light of that fact, it is extraordinary for the Chancellor to claim that an average family will be no worse off as a result of those changes, when seven in 10 motorists will pay more in vehicle excise duty.

Stewart Hosie: Is not the position actually worse than that? In the next two years, the take on the vehicle excise duty change will be £1.2 billion. Given that amount of extra yield, does it not indicate to the hon. Gentleman that the Government are not planning for any behavioural change? It is indeed just a tax.

Peter Ainsworth: I think that the hon. Gentleman makes an extremely good point. That is one of the reasons why the Secretary of State had such difficulty answering my questions earlier.
	What will all the extra tax do for the environment? That is what we need to know. According to  The Guardian, it will help reduce CO2 emissions from the transport sector by less than 1 per cent. So, it is not a green tax; it is not a meaningful part of the solution to the greatest challenge that we face. It is a stealth tax. I cannot think of a better way to alienate the public from the whole green agenda than dressing up stealth taxes as green.

Steve Webb: Clearly, there are two points here: what happens to the money and the structure of the tax. If all the money raised through the increased tiered VED had gone on some other tax cut, would the hon. Gentleman have considered that, as a package, a good thing? Does he support VED being tiered, particularly for new cars, provided that the money is spent cutting other taxes?

Peter Ainsworth: We have supported the banding, and I have said that we support the principle that if we are to have green taxation, it should apply at the point of choice, not retrospectively. So, if I have understood the hon. Gentleman's question correctly, I think the answer is yes. However, the important caveat that we have made clear is that any revenues from additional green taxes should not just disappear into the Exchequer, but should be used to cut taxation on families and on other things that help society and help to make the country a better place.
	I believe that people, by and large, are genuinely anxious about climate change and keen to be part of the solution. A responsible Government would provide leadership and encouragement, not use the cover of eco-taxation simply to raise funds because they have been spending beyond their means. Cynicism of that kind is deeply damaging to the green cause.
	The next announcement is the plan to support auctioning 100 per cent. of allowances for large electricity producers in phase 3 of the EU emissions trading scheme. We support that—in fact, we have been calling for it for quite a while—but what do the Government intend to do with the proceeds of the auction, which are likely to run into billions of pounds? Will they be earmarked for investment in green technologies or simply be pocketed by the Chancellor? Perhaps a Treasury Minister will answer that question now, or, if they prefer, when they speak later in the debate. Later, then.
	Next is the setting up of the new green homes service. I say that it is new, but we had already heard about it last year—from the Secretary of State, I think, and from the Prime Minister himself. The £26 million allocated to the green homes service, spread across the country, would mean each household receiving £1-worth of advice on how to green their home. Is there not already advice available on a multitude of websites and from a multitude of Government-sponsored agencies and supported organisations, from the Energy Saving Trust to Warm Front and Warm Zone, which I had the pleasure of visiting up in Newcastle at the weekend.
	Then we have this:
	"Incentivising only the most sustainable biofuels, by shifting support away from the duty differential to the Renewable Transport Fuel Obligation in future years".
	As the Secretary of State knows, there is absolutely no benefit to the task of dealing with climate change if renewable fuels are grown at the expense of the rain forest.
	We on the Conservative Benches have a serious objection to the renewable transport fuel obligation in its current form because we believe that there is a real danger that it will do more harm than good—damaging some of the most important and fragile habitats on the planet, endangering already-threatened species such as the orang-utan and enhancing the risk of food shortages.
	DEFRA's own chief scientist has warned that
	"the way we are currently producing biofuels is not the way to go".
	The implication in the Budget that axing the duty differential on biofuels and placing all our hopes on the renewable transport fuel obligation will solve our problems altogether is naive or even deceitful. The truth is that, by cutting the duty differential, the Chancellor will save some £550 million in 2010-11. It has nothing to do with the environment and everything to do with the fact that the Chancellor is living beyond his means.
	Here is the next item in this sad litany:
	"Increasing climate change levy rates in line with inflation".
	That is okay, as far as it goes, but the truth is that the climate change levy does not do the job—it does not do what it says on the tin. It does not even live up to its own name. It is a tax on industry's use of energy, and a largely ineffective one as well. We have been saying that for some time.
	Only the other week, the Select Committee on Environmental Audit found that the climate change levy has had
	"relatively little effect on business emissions".
	The way in which the Prime Minister clings to the climate change levy as if it is some kind of lifeline to save his green credentials is increasingly pathetic and desperate.
	Next is the re-announcement of aviation duty to replace air passenger duty. That is not new, but I have no problem with the measure since it was a Conservative proposal in the first place. Then there is
	"an ambition for all new non-domestic buildings to be zero carbon from 2019".
	I applaud that ambition. However, there is a yawning chasm between the Government's ambitious rhetoric and the reality of delivery. It will take a Conservative Government to ensure that that particular ambition is turned into a reality.
	Next there is
	"extending the Stamp Duty Land Tax exemption from zero carbon homes to new flats, retrospectively from 1 October 2007".
	There is some extending to do here, because by the end of 2007, the number of homes throughout the country claiming zero stamp duty on the basis of being zero-carbon was six.
	The final item in DEFRA's highlights of Labour's greenest Budget yet is an increase in the aggregates levy from 1 April 2009, which is unexceptional. However, slipped in before the news about that levy is:
	"Government legislation and the imposition of charges if retailers do not take voluntary action to eliminate single-use carrier bags".
	That was the thing that was designed to grab the headlines and to act as a smokescreen to cover the rest of a limp, half-hearted, piecemeal, unambitious and disappointing set of rehashed and boring announcements.
	The DEFRA press release does not tell the whole story, however. This eye-catching initiative proposes the possibility of legislation if "sufficient progress" to reduce the use of plastic bags is not made voluntarily. What do the Government mean by "sufficient progress"? Is it a reduction from the present number of plastic bags—about 13 billion—to 12 billion, to 10 billion, or to 5 billion? We have no idea what "sufficient progress" is. Industry has no idea. How can the Government expect it to deliver voluntarily when it is not being told what it is expected to deliver? The DEFRA press release talks about action "to eliminate" the use of plastic bags. It is up to the Government to clarify the target for which the industry should be aiming voluntarily to avoid legislation. The big highlight of Labour's greenest Budget yet was a vague threat about plastic bags, which has nothing to do with the Budget or the Chancellor anyway. This was a serious missed opportunity.
	While I accept, and welcome the fact, that there are hopeful signs that Ministers are executing a U-turn on our proposal to introduce electricity feed-in tariffs, which could transform the economics of renewable energy in this country and create a huge number of new jobs, where are the green individual savings accounts to encourage people to invest in technologies that will help to combat climate change? Where is the plan for a new market exchange for environmentally responsible companies? Where is the proposal for an effective replacement for the climate change levy that can play a proper part in helping to price carbon across the economy? Where is there any sign that the Government recognise the need to create incentives to capture and use waste heat from power generation? Where is the vision? Where are the ideas that will propel Britain to the forefront of the huge commercial opportunity for low carbon growth that is opening up across the world? That opportunity is being exploited by France, Germany, Japan and the United States, but Britain is being left behind. The answer is not in this Budget and not in this Government.
	We have an environment Department that cannot even control its own budget. When it is not cutting support for environmental schemes, it spends its time losing arguments with other Departments. We have a Government who are tinkering at the margins, fiddling about with unpopular stealth taxes, and failing either to deliver properly joined-up policies on climate change, or to protect the environment.
	Faced with our greatest obligation to future generations and the most serious and pressing challenge that the world faces, it is pathetic to wag a finger at plastic bags while simultaneously waving through plans to build a new generation of coal-fired power stations without carbon capture and storage. It is pathetic to scowl at people with Mondeos and people carriers while simultaneously ushering in a huge increase in aviation capacity. It is a betrayal of trust to dress up stealth taxes as green taxes and it does not fool anyone. This was a pathetic, boring and unambitious Budget from a Government who have run out of ideas, run out of money, and overstayed their welcome.

Alan Simpson: I would normally try to make my contribution to the Budget debate on the day on which the Chancellor delivered his statement, but unfortunately I was laid low by a bug from which I am still struggling to recover. If I think that I have had a difficult week, however, it must be said that the world outside has had a dramatically catastrophic week in comparison with mine.
	Perhaps it will prove helpful to me to make my speech today rather than last week, as I had planned. It is certainly nice to be able to do so on a day on which my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is present. He is very kind in putting up with being pestered by me on climate change issues. I hope he will forgive me if I add to that today, and pester him as though he were Chancellor for the day. I do not think it sufficient for us to hold the Government to account on climate change issues. We must recognise that we face a challenge from an unholy trinity: climate change, peak oil and market meltdown.
	This bad week for me has been a wretched week for Bear Stearns, the fifth largest United States investment bank. Last year its shares were trading at $176 each; over the weekend it was sold for $2 a share, and the markets are saying that they see no end to the prospects of meltdown. The Fed has intervened, and for the first time since the great depression has extended its lending rights to companies that are not banks or investment banks. Such is the level of concern about the extent to which conventional money markets have been creating funny money and a bubble economy that is now bursting all around us, and shows no sign of coming to an immediate end. It seems to me that we cannot have this Budget debate without seeking to engage with the fact that we may have to think about systems failure on a global scale, and about what the United Kingdom must do to manage what is within our grasp in the context of that failure.

Kelvin Hopkins: This may be a trivial point, but is my hon. Friend saying that bankers have learned nothing since the south sea bubble and the Wall street crash?

Alan Simpson: Sadly, that is precisely what I am saying. We are going back to the days of the south sea bubble, when money in the private sector could be created without constraints on a scale that led the world in pursuit of follies for which we all paid a phenomenally high price. What makes the present position harder is the fact that it comes at the same time as other developments. Today oil hit a record price of $111.80 a barrel, from which it has just slipped back. The oil companies are beginning to say to us openly that the world will face an oil crunch by 2015. That means they understand that the last four years, in which oil production has never really exceeded 85 million barrels per day, have nailed the lie that there are vast untapped reserves that will just cope with the burgeoning demands on oil from India and China and from developing nations. We live in an era of declining quantities of available oil and escalating oil prices, and even according to the oil industry's calculations, that will hit us by 2015. Furthermore, over the weekend scientists told us that glaciers were melting faster than even they predicted.
	The challenges of climate change, peak oil and economic meltdown redefine the parameters within which national Governments must construct their budgets. I think that it is time for us to be bold, and say that it is impossible to run conventional budgets in unconventional times. That requires us to think outside the box and to think in much more dynamic terms.
	It is right that hon. Members on both sides of the House have thrown into question the purpose of green taxation. If it is no more than a form of stealth taxation, we as politicians will kill the public support for green taxation. It has to be transparent that the purpose of green taxation is to change behaviour: it is not to fill the Chancellor's pockets, but to change the mechanisms through which the markets work in the United Kingdom, and the ethical basis on which those markets work. Perhaps it is a good time to cut out the Chancellor as the middleman in that process. Easy and available mechanisms are on offer to us today, if only we had the willingness and the vision to reach out beyond our shores, or beyond the Treasury mindset, to see how those might work.
	I want to focus on five aspects of the challenges that the Budget should have addressed and all future Budgets will have to address: energy security, food security, water management, sustainable transport and financial accountability. I begin with financial accountability. There are no easy solutions to paper over the mess that has been created within the international financial systems, but we should be saying that the UK will place two principal requirements on how our financial systems work. First, we should introduce legislation that says that directors will be made personally liable for anything not reported in their annual accounts. That would bring to an end the off balance sheet accounting and securitisation of assets that have allowed the creation of Mickey Mouse money on a colossal scale.

John Redwood: Would the hon. Gentleman also apply that to the Government, who are the biggest offender in not putting huge off balance sheet private finance initiative, public-private partnership and Network Rail obligations on their balance sheet, unlike the directors of Northern Rock, who put the whole of Granite on the balance sheet?

Alan Simpson: I would include the Government. In fact that was my second point. The second rule that I would bring in would say that no public contracts should go to any company that was registering its activities in an offshore tax haven. As an adjunct to that, it should be a precondition of all public sector contracts that they would not include any entitlement to shift the company or the assets offshore for the duration of the PFI contract. It seems that large numbers of contracts are shifted offshore to make them more tax-advantageous to the companies that have been getting them. It is wrong for us in government to preach one set of ethics if we practise another, so we should set that as our own requirement and set those preconditions for all other companies.
	Moving on from that, I want to look at ways in which we should as a Government and as a House be requiring markets to be the drivers of their own transformation. The best example of how to do that is in Germany and it is in the context of energy. Opposition Members and a number of Members on the Government Benches have tried over a number of years to get the Government to do precisely what the Secretary of State has now said they will do, which is to look at feed-in tariff legislation and the way in which it works in Germany. However, it is not enough to say that we will be looking at that. That system has a proven record of delivery. How it works is simple. Germany introduced market rules that gave citizens the right to supply clean energy. In addition, the Government placed a requirement on the energy sector, saying, "You will pay your customers four times the market rate on 20-year guarantee periods, reducing at 5 per cent. per year, for the clean energy that you supply in the system." Yes, other customers within the energy system have to pay for that. It worked out at an average of £12 to £14 per year per household energy bill.
	When I tried to raise that with Government civil servants in the Department for Business, as Usual, they said, "It is an interventionist measure, which we do not support." I said to them, "You do support interventionist measures; it is just that you support only incompetent ones." We have the renewables obligation, climate change agreements, the climate change levy and commitments to carbon emissions trading. They all add costs to people's bills, amounting to £140 a year on the average household bill. For that we get one tenth of the carbon savings that people get in Germany for their £12 a year. This is not about market intervention; it is about shaking off the shackles of our own incompetent intervention. I hope that amendments—supported by Members of all parties—will be tabled to the Energy Bill that say at the very least, "Yes, by all means look at feed-in tariffs, but we should be under a statutory obligation to bring in a scheme of feed-in tariffs within one year of the passing of the Bill". There should also be a commitment to extend that not only to electricity, but to gas. We must look into that; I know that the Secretary of State has looked into it in terms of his own Department.
	There are some rules that we must change. Green energy electricity suppliers have been queuing up in the UK for up to 10 years to get access to the system. They cannot do so because the existing suppliers have first call on access to the system and the rules are that only if they cannot meet the energy demands of the day are new suppliers to be drawn in. Therefore, as Kingsnorth comes from an existing supplier, it will take precedence over a green energy supplier that has been in the queue to get access to the system for 10 years. We must give green energy suppliers preferential access to the system.
	In terms of renewable gas, we currently have problems with the disposal of waste, and they will become even greater when the EU waste directive comes into effect in 2010. Germany, however, has been putting decayable waste not into landfill or incineration, but into anaerobic digesters. It therefore turns the waste into energy and puts the gas back into the system, and it does so at the locations—the communities, towns and villages—that the waste was collected from. The waste is used there in combined heat and power plants to deliver a local energy system. We cannot do that because our current system of renewables obligations applies only if the gas is converted into energy at the anaerobic digester plant, as a consequence of which there would be the huge cost of ducting heat for many miles, which would be utterly uneconomic. We need, therefore, to change the market rules for our energy systems.

Henry Bellingham: The hon. Gentleman is making a superb speech, and I congratulate him on having one of the six houses in the entire kingdom that achieve the target of total energy-efficiency.
	Does the hon. Gentleman agree that anaerobic digester technology is far preferable to the straightforward incinerators that many local authorities throughout the country are hoping to build?

Alan Simpson: I do agree, and I ought to say that I was the chair of a waste disposal company in Nottinghamshire that was responsible for the incinerator we have in Nottingham. At the time, we dramatically raised standards in filtering and emissions. I look back at that and think it was a half-good idea for the second half of the last century, but it is a hopeless idea for the beginning of this century. We ought not to be wasting a moment in going down that path now, when the true visionary steps take us outside such conventional boxes and into a different framework of thinking about, and delivering, sustainable energy from our own waste.
	I have a confession to make. Over just this past week I have come to realise that I have become a Brownite. Unfortunately my political conversion is to the beliefs of, Lester Brown, whose book, "Plan B: Rescuing a Planet under Stress and a Civilization in Trouble", sets out how we can transform our economy to deliver 80 per cent. carbon reductions by 2020. Achieving that, however, requires us to give industry the responsibility of being, and the incentive to become, the driver of its own transformation.
	Let me illustrate how that would work with transport. It is essential to say that we require something more than a raising of the vehicle excise duty on gas-guzzling vehicles, so what would be seen as transformational? Let us say that we extended the German energy model to our own approach to vehicles. The sensible approach would be to require the industry to impose a levy of, say, £3,000 on all gas-guzzling vehicles, but which can be a transfer payment to meet the cost of hybrid, low-carbon vehicles in a given manufacturer's own range. That way, our citizens face the prospect of a cash incentive to transfer to low-carbon impact modes of transport, rather than high-carbon, so it should be economically advantageous. For manufacturers who do not produce hybrid or low-carbon vehicles, the money should go into an industry-administered fund that pays for the retroconversion of vehicles to meet low-carbon emission standards. That way, the industry is made responsible for its own transformation.
	I should point out that in 1998, the Government reached an agreement with the motor manufacturing industry that by 2008 it would have reduced carbon emissions from 190 g per kilometre to 140 g. My understanding is that there is not a cat in hell's chance of its doing that. As someone who has been somewhat sceptical about voluntary agreements, I say, let us take this one at its word. Let us say, "Fine—there will also be a levy of £1,000 on every vehicle you sell that does not meet the 140 g per kilometre standard. You keep that money in an industry fund to pay for conversion to low-carbon vehicles." People may say that that is somewhat draconian, but even if we wait for the oil industry's 2015 figure, we will face an oil price crunch that will lead to a crisis in terms of the unaffordability of the conventional ways in which we have tried to move around the country. We should anticipate this, live with it and engage with it. We should move towards transformational budgetary economics, rather than adopting the "steady as you go" approach, with the notion that, hopefully, someone else will dispose of the crisis for us.
	We could do exactly the same with aviation. It would be really helpful if we did not put all our eggs in the presumptive basket of the carbon emissions trading scheme, which is a Mickey Mouse idea at best. All the nations that have been in that scheme cheat, and so do we. At the end of the day, it is the scope for dishonesty that will sink the scheme. The truth is that it is those who act as middlemen in the financial system, and the largest polluting industries, that have really made the money out of emissions trading. Even if all the permits were auctioned, that would still prompt the question whether that money would go directly into funding behavioural changes that would transform our approach to sustainable economics. I do not think that it would.
	The simpler way, to pick up on a point made by the hon. Member for Altrincham and Sale, West (Mr. Brady) in a previous debate, is to say that not all aircraft are the same in terms of their carbon emitting standards, which is absolutely true. We could classify aircraft in the same way that we classify fridges. We could say to airports, "On the basis of your last year's journeys in and out, you will be allocated a carbon miles quota. Next year and for every year after that, that quota will reduce by 5 per cent., and it is up to you to work out how you manage the affordability and frequency of flights, the balance between long and short haul and the balance between passenger and freight. However, none of it escapes a direct and easily measurable quantum that establishes that the carbon mileage entitlement is being reduced by 5 per cent. per year. That is the way we have to go." Indeed, we could do exactly the same with shipping. That is a measurable, rather than speculative, approach to transforming the way in which the markets operate.
	My final point concerns food. One point that has emerged from the changes in oil prices in the past year is the realisation that the impact kicks in in our shopping trolleys far sooner than it does at the petrol station. We will be faced with real problems about how people can survive, not only in the eating part of everyday life but in the heating part. Henceforth, all Governments will be required to produce budgets that address their own food security needs. We must refocus on that responsibility, because of the extent to which the UK has walked away from it on a presumption that globalised food trade will always provide an answer from somewhere. Whether we put it down to climate change, peak oil or economic collapse, that ain't gonna happen any more.
	We need to relocalise our presumptions about food markets, in exactly the same way as other parts of Europe have maintained their strong, regionalised food systems. In many cases, they highlight the ecological virtue of those systems by pointing out where they lower carbon miles, reduce pollution and congestion, and strengthen the lines of food accountability from the local producer to the local consumer.
	In my constituency, a quiet, unassuming man who has just taken over the catering responsibilities for the combined Nottingham University Hospitals NHS Trust has saved the hospitals at least £1 million a year just by throwing out the processed food caterers and replacing them with local food contracts. If that can be done on a simple scale locally, it can be done on a national scale. We need to do it because tomorrow's economics will not be a continuation from today of business as usual. Ministers need to be willing to step up to the plate and be visionary and bold in setting out transformational programmes that will change the whole character of how we live. I know that the Secretary of State can do that; I just wish that he could get his colleagues to join him.

Steve Webb: It is always refreshing to follow the hon. Member for Nottingham, South (Alan Simpson). Of the three contributions so far, his gave us the breadth of vision to match the scale of the problem. I come to the issue relatively fresh, having been the party spokesman only since Christmas. I have been astonished by the gap between the scale of the problem, as per the rhetoric in the Budget and the scientific evidence, and the time scale and scope of the proposed measures. The Budget is a classic example of the contrast between what is actually being done and what needed to be done. My hon. Friend the Member for Twickenham (Dr. Cable) described the contrast between the "apocalyptic language" and the "minimal and deferred" changes, which summed up the situation nicely.
	It is important to give the background to the Budget, as the hon. Member for East Surrey (Mr. Ainsworth) did. It is timely that the National Audit Office produced over the weekend the report that he cited, because it gives us a different take on what has been going on—a take that does not reflect terribly well on successive Governments' approach to climate change. I think that it was the Minister for the Environment who at Thursday's oral questions gave us the figures for carbon dioxide cuts. The figures he gave were technically correct with regard to the Kyoto definitions, but he will know that they are narrow definitions, although I fully accept that they are internationally standardised.
	In response to an intervention of mine, the Secretary of State said that aviation and shipping were a footnote to the international statistics.  [ Interruption. ] As he says from a sedentary position, that is where they are—they are a footnote. He knows perfectly well, as we do, that in reality they are a huge and important issue. In judging how well this country is doing on this vital issue, surely we should look for the most comprehensive measures possible, not congratulate ourselves on progress against a narrow measure that simply excludes a whole set of carbon emissions that are just as damaging as the ones in the figures. That is not just a debating point or a claim that the Government pick the figures that look best and the Opposition pick the figures that look worst. We should be concerned about the real impact of CO2 emissions, which are surely most relevantly measured against the broadest measure produced by the Office for National Statistics.

Phil Woolas: I do not want to take up time, but I must say in response to a point that has been made in the debate and in national newspapers that the figures I gave, as I said at oral questions, related to greenhouse gases, not specifically to CO2. The Government have always been clear about the difference.

Steve Webb: I fully accept the distinction, but given that CO2 is the largest of the greenhouse gases by a long way, the Minister will surely be as disturbed as I am by the line in the NAO report that says:
	"There have been no reductions in UK carbon dioxide emissions if measured on the basis of the environmental accounts."
	The principal difference between the environmental accounts and the Kyoto figures is aviation and shipping. I accept there is an issue about British people overseas, but the exclusion of those factors is fundamental. On the more comprehensive definition from the Office for National Statistics, we have made no progress in 17 years, which is truly shocking. Against that backdrop, the Budget measures seem all the more timid.
	There has been some discussion of what the hon. Member for East Surrey called indulgences—or the buying of credits. In a sense and at one level, the Secretary of State is right. What matters is that we get emissions down, and it could be argued that it does not matter so much where that happens, but in the long term buying credits puts off the day of transformation to the low-carbon economy that the hon. Member for Nottingham, South mentioned, while other countries make the necessary changes. If we believe that the situation is really urgent, what we do should be additional to what other countries are doing, as far as possible. We should not allow them to do it instead of us, because that just puts off the evil day.
	Without the amendments in the other place, the 60 per cent. cuts proposed in the Climate Change Bill could have been entirely achieved by buying other people's CO2 cuts. We would not have needed to cut our domestic emissions at all and we could still have satisfied the 60 per cent. target, and that is totally unacceptable.

Nick Hurd: Do the Liberal Democrats therefore support a cap on the purchase of overseas credits, and if so what level would they put that at?

Steve Webb: I do support such a cap, and before the Bill reaches this House, I shall read the debates in the other place, in which their lordships agreed a figure of 30 per cent. I shall certainly oppose Government attempts to reverse that, but I have an open mind on whether it should be lower. The key point is that we need to lock into a low-carbon structural economy, and buying our way out simply defers that.
	The other contextual point that I want to make is about the contrast between the bits and pieces—such as the plastic bags—and the fact that in almost the same week the Government encouraged expansion at Heathrow and Stansted. A whole new generation of coal-fired power plants, without carbon capture and storage, is likely to go ahead. Marginal changes are being made, but the whole thrust of policy in other areas, run by different Departments—that is a key point—is in completely the other direction. All hon. Members in their places today would probably wish more power to the Secretary of State's elbow. We wish that he had more influence on the Government, but so often his Department nibbles around the edges and does its best, but another Department comes trampling down the track and reverses that. That has to change.
	I fully accept that green taxes are only one lever among many, but they work. I wish to cite—and I do not do this very often—a very successful Conservative initiative on green taxation in the 1980s: the switch to unleaded petrol. Actually, that was a green subsidy, not a green tax—a differential in favour of unleaded petrol. At the start of the 1980s, who would have thought that by the end of the decade cars that ran on leaded petrol would be oddities? It did not take long to change because the incentive structure was put in place. The same could happen with the vehicle excise duty tiering that we have heard about—

Kelvin Hopkins: Another example of a transformation that took place quickly and effectively was the switch from coal gas to natural gas. If there is a will, such things can be done.

Steve Webb: That is right, and such examples expose the timidity of the 2019 goals for various measures in the Budget. If we have drive and vision, these things can be achieved much more quickly, sometimes by mandate, as with the gas switchover, and sometimes by incentives.
	I take the point made by the hon. Member for East Surrey about not using the cash from the VED change—the showroom tax—for other tax cuts, but my worry is that it stops. In other words, if I am thinking of buying a gas-guzzling luxury car, even a VED of £900—as opposed to one of £400—is neither here nor there if it lasts for only one year. Why not persist with it? Given that the purchase is the critical decision, why not keep the VED at that rate for the lifetime of the vehicle? That would send a strong signal and it would encourage manufacturers to start thinking about the new cars that they put on sale. That might lead to a much quicker transformation in what is offered.
	The Secretary of State was right to point to the issue of best in class. There are very fuel efficient versions of almost every vehicle, be they rural 4x4s or family cars. It is not that people cannot have big family cars or 4x4s, but we need strong incentives for them to purchase the more fuel-efficient models. The incentive at the point of purchase would be much stronger if it were not a one-off hit, which is probably quite marginal to the cost of purchase.

John Redwood: The hon. Gentleman makes some interesting points. Is it Liberal Democrat policy to accept the levels that the Government propose but to make them annual, or does he think that the levels should also be raised?

Steve Webb: We certainly think that the increased VED should continue: it should not be a one-off hit. We also think that green tax, as broadly defined, should represent a significantly bigger share of the total tax take. As the hon. Member for East Surrey said, that should not be part of an overall tax increase, and green taxes should be used to cut other taxes. We have identified the standard rate of income tax that lower and middle earners pay.
	This Budget takes the green tax share to 2.8 per cent. Ten years ago, it was 3.6 per cent. The share of green taxes has therefore fallen by about a third in 10 years. The proposed taxes are by no means swingeing new green taxes: they will not even fractionally reverse the decline in the past 10 years. Given that we have to raise a certain amount in taxation, surely it is common sense to raise that on pollution and the marginal choices that increase carbon emissions, rather than on income and the things that we want people to do. The present balance is wrong, and I do not understand why the Government do not address that. I take the point made by the hon. Member for Nottingham, South that the risk is that the Government will totally discredit the notion of green taxation, which is one of the key levers we have at our disposal.
	How much green taxation was in the Budget? The Institute for Fiscal Studies says that by 2010 additional green taxation will be £1.8 billion a year. In the context of Treasury estimates of revenue, that is a rounding error. The Chancellor routinely revises his income and expenditure figures by far more than that every six months. The idea that the Budget contained some huge tax switch that will transform our battle against climate change is nonsense, and in his heart of hearts the Secretary of State knows that. The scale of what is proposed is simply not up to the scale of the problem.
	We have heard of the endless deferral—to 2019—on new buildings. The schools programme has a target of 2016. The Department for Children, Schools and Families is rebuilding schools up and down the land, so for another eight years new schools, which will presumably stand the test of time for decades, will be built to inadequate standards, locking in sub-standard carbon performance. That should be dramatically improved—and quickly.
	We have heard already about the small scale of the green homes service—£1 per household. The Secretary of State used to hold the same position at the Department for International Development. The British Government will clearly contribute worldwide to attempts to deal with the consequences of climate change, and we know that many of the poorest countries will be the first to suffer. Does he therefore share my view, and that of the leader of the Liberal Democrats, that our spending on alleviating the consequences of climate change should be additional to the 0.7 per cent. target and should not eat into it? Surely it would be a double penalty on the world's poorest people to say, "Actually, we were planning to spend money on clean water, education, disease protection and all those things, but we are not going to spend as much on them. Our actions of decades past are ruining your natural environment, so we will take a bit of the money that we were going to use to try to stop your children dying before the age of five to make sure that your earth doesn't flood." Surely, if 0.7 per cent. of GDP was a proper target for the humanitarian and infrastructure work that needs to be done anyway, the climate change mitigation work that we will do overseas should be additional. I hope that the Minister who responds to the debate will give us the Government's position on that.
	I want to say a few things about the energy efficiency and fuel poverty aspects of the Budget. I intervened on the Secretary of State and queried some of the cuts in his departmental budget. Obviously, when it comes to energy efficiency, we have another example of that, which is the freeze on the Warm Front programme. The people who perform the home installations reckon that compared with the previous three-year period they will soon be able to do fewer houses. The cost is going up and the budget has been frozen in cash terms.
	Warm Front is a highly impressive, highly effective programme. It is not without its flaws, but it is an excellent scheme. I am therefore concerned that cuts have been made. When we ask Ministers about that, they cite other schemes and initiatives, such as the carbon emissions reduction target—CERT—but that is not an adequate substitute. It is not as good, for a number of reasons. For example, it rewards a company for saving carbon emissions among its customers. However, a company gets a better return from saving carbon emissions for a big, wealthy customer with high carbon emissions than it does for a small consumer—perhaps a single pensioner living on their own. In other words, for a given amount of insulation, companies get more return by going for, in some cases, the more prosperous.
	I know that there are minimum quotas, but they have gone down, too. I understand that the number who have to be in the target groups has gone from 50 to 40 per cent. and that the target groups have been broadened, which is crazy. We want the priority to be the fuel poor. The Government know who the fuel poor are, broadly defined—they certainly know who receives means-tested benefits. Companies in the CERT programme do not know which of their customers are on means-tested benefits, so they have to spend time, effort and money finding out or speculating about that, when the Department for Work and Pensions knows.
	I hope that the Secretary of State's Department— [ Interruption. ] The Minister for the Environment says it is because of data protection. I quite understand that the Department for Work and Pensions cannot simply hand over benefit details, but why, for example, could not every recipient of pension credit receive a certificate, once a year, with their annual uprating statement? They used to get certificated housing benefit, entitling them to a rent rebate and to have their council tax paid. Why should they not receive a certificate of eligibility for Warm Front or CERT, or for whatever scheme happens to be running, that they take to their supplier? The supplier would not have to know which benefit they were on or what their income was. No databases would have to change hands. It is a relatively simple idea. The mailing is going out anyway. I am reassured that the Secretary of State is reaching for his fountain pen, and if it happens, I am happy to share the glory with him.

Hilary Benn: It is a felt tip.

Steve Webb: That will do.

Martin Horwood: In fact, there is a precedent for a very simple system: the charitable gift aid process. Donors make a declaration based on their knowledge of their tax status without revealing their tax details to the charities. It works very well.

Steve Webb: I am grateful to my hon. Friend. There is probably a variety of ways of doing it, of which that is one. My central point is that expecting the fuel companies to try to identify their poor customers, when the Government already know—when one bit of government wants it done but another will not give that information—does not seem to be joined-up government.
	I want to raise another point that might interest the Minister, about which something could be done quite quickly. We know that over the next 10 years or so the Government want everyone to have a smart meter. One of the key issues for me is the potential smart meters have to benefit the environment and tackle fuel poverty.
	I have in mind what I would call a super-smart meter. The big worry about the domestic energy market is the alleged lack of competition. All sorts of investigations are going on, and consumers think that the companies all put their prices up together. Clearly, we want maximum switching and want people to go for the best tariff for them. We want energy efficiency tariffs and so on. If a smart meter records someone's actual consumption of gas and electricity, why should not the information be sent to a website such as moneysupermarket.com—it has to be a two-way flow of communication—so that it can look at all the tariffs and shop for the customer? The customer would not have to be online, web-savvy or anything like that. The smart meter would do it for them. It would come back and—it might have a Stephen Hawking-style voice—it would say, "It's EDF for you this quarter", or whatever else. In other words, it would match customers' circumstances with the optimum tariff and switch them to it.
	The technology would probably be fairly straightforward. The company would need bank details—practical issues would have to be resolved—but instead of having managed methods of controlling the energy market and competition, it would almost be the economist's dream of perfect competition. We would have an almost infinite numbers of buyers, perfect information, negligible transaction costs and regular switching, which keeps companies on their toes. Fuel companies will hate it, because they will not have the stickiness that means customers stay with them when they should not. I say this to every Minister I meet, and I hope that at some point someone will take me seriously and adopt it.  [ Interruption. ] I am pleased to hear the Minister for the Environment say that it is a good idea. I am grateful for that.
	I have a couple of final observations. I listened with interest and a lot of sympathy to the hon. Member for East Surrey. I agreed with a great deal. I waited for the answer. He came up with some of the things that the shadow Chancellor has said, many of which are gimmicks. He asked where the green ISAs were. I travelled in by tube from Paddington to Westminster, and there is an advert that says, "Get your green ISA."

Gregory Barker: With respect, before the hon. Gentleman starts to criticise policy he ought at least to take time to understand it. A green ISA would be an extra amount in addition to the current ISA, which could be invested exclusively in companies at the forefront of green innovation and on course to meet our national CO2 reduction targets. It is in addition to the existing ISA, not just another product. Perhaps he could take time to understand the idea before he attacks it.

Steve Webb: It clearly is a gimmicky idea, and I say that for a reason. There is a cost-benefit analysis for each measure, as we heard from the hon. Member for Nottingham, South. Each scheme has a cost and a return. The idea that the presumably higher rate tax relief for many investors delivers the best bang for the buck in delivering improved energy efficiency is extremely implausible. The investment will be made in tiny chunks. The scale of investment needed for such things is vast. A few thousand pounds will come in from, on average, relatively wealthy individuals at the cost of a hefty tax break. Essentially, such ISAs are tax breaks for the well-off. There are far better ways of spending that money that would benefit the fuel poor, such as home insulation. I put it to the hon. Member for Bexhill and Battle (Gregory Barker) that money spent insulating a poor pensioner's draughty house delivers a vastly better return for Government cash than tax breaks for high earners through additional ISAs.

Gregory Barker: The hon. Gentleman does not grasp that we need to do all those things. Is he aware that there are 17 million ISA savers—albeit that most of them currently hold those accounts in cash because of the unfortunate economic situation? As there are 17 million ISA holders, they are not just the prerogative of the high-income few. This is about driving dynamic industrial change across our economy, making genuine change, driving capital markets and recognising excellence in British companies.

Steve Webb: There was an interesting elision—in fact, the hon. Gentleman corrected himself as he spoke. He knows full well that the majority of ISAs are cash ISAs. He is talking about a further tier of ISAs, so the savers who can make that additional contribution will, by definition, be the wealthiest. The poorest people cannot even reach the existing threshold. They would need thousands of pounds more. A relatively small proportion of ISAs are equity ISAs, and I will bet any money that a high proportion of the equity ISA holders tend, on average, to be higher income earners. This is potentially a highly regressive way of delivering marginal benefit. There are so many better and more efficient methods, but because the shadow Chancellor has no substantive policies, he goes for these grand gimmicks.
	It was interesting to hear the hon. Member for East Surrey ask about the proceeds from the third round of emissions trading auctions. He posed the rhetorical question, "Where will the money go?" but he did not say what the Conservatives would do with it.

Peter Ainsworth: rose—

Steve Webb: Can the hon. Gentleman tell me that the shadow Chancellor has said to him that the money can go on public spending? I should be very interested to hear a crystal clear answer to that question.

Peter Ainsworth: I hesitate to intervene on the hon. Gentleman, because I sense that the House is getting rather tired of him. We have already said that we will use some of the proceeds from auctioning the permits to fund the feed-in tariff system.

Steve Webb: We are talking about a £9 billion windfall in the second round, and the third round of licences will presumably raise even more. Simply to say "some" when the amount could be between nought and £12 billion is far too vague for a party that has pretensions to government.

Kelvin Hopkins: I want to make a point in support of the hon. Gentleman. He says that investing in insulating poor people's houses is a much better way of spending money. There is an opportunity cost to both courses of action, but we should spend all the money on investing in poor people's home insulation, to the benefit of everybody.

Steve Webb: I certainly share the view that that is a priority, and it is an improvement that we can make now, rather than in 2019 or whenever. To draw together the threads of my speech, my priority is to stress the urgency of the situation. There is a mismatch between the grave tone of the rhetoric and the scale of the problem on the one hand, and the extreme modesty of the measures on the other.
	I want to mention one other thing that can be done now. We know that even sober-suited organisations such as Ofgem have said that there is a £9 billion windfall for energy companies in the second round of EU emissions trading. It is a huge opportunity to spend money on the things that we have been talking about—home energy insulation and encouraging renewables—without increasing the tax burden. As the hon. Member for East Surrey says, we do not have to wait until the third round of EU emissions trading in 2012; the windfall in the current round could be used to encourage renewables through feed-in tariffs, which we support. The windfall could also be used for investment in carbon capture, which is another part of the mix. That would have been so much bolder, so much more effective, and so much more in line with the scale of the problem. We have had a huge disappointment. I hope that in years to come we do not rue the fact that we failed to take action now, and do not, as Nick Stern says, have to take much more expensive and dramatic action.

Harry Cohen: I want to speak about the Budget overall, but I shall start by giving my pennyworth on the environmental issues. First, I agree with the Secretary of State that the main tool the Government have is not the Budget but the Climate Change Bill, and I therefore look to him and the Government to agree to including much stronger carbon emission targets in the Bill.
	Secondly, I welcome the 10 per cent. increase in air travel tax in the Budget; it is now the plane that is taxed, rather than the passenger, but we have to do more than that because air travel is a key source of carbon emissions, and we need to get a grip on the issue. The Government cannot increase the size of every airport, either. They have to curtail airport expansion as part of a proper climate change policy.
	My third point is on traffic congestion. Again, the Chancellor was right to put a tax on the gas-guzzlers—the high-carbon vehicles—but the Government need to be more courageous on price, including petrol price, and on public transport. I know that there has been a big increase in public transport, and I welcome that, but more needs to be done. More investment is needed in green public transport; that is where the emphasis should be. We need to move away faster from oil-based fuels.
	On energy efficiency, the priority must be that which the Government set in their early years in power—helping vulnerable people in their homes. We must go back to that target. I shall say a bit more about that in the main part of my speech. We should encourage combined heat and power schemes, the use of solar panels and microgeneration in new homes, and there should be lots of incentives for people to use those technologies in existing homes, too. We also need promotions encouraging people, in a sensible way, to use less energy. That is an important point, and we could start with public offices, where the lights are burned all day and night, unreasonably. They could set an example.
	The final point I want to make in what I hope is a succinct summary of green issues concerns renewables. The emphasis has to be on renewables; I think that they are a national priority. They should be considered to be in the national interest, including when there are objections to them. Of course we will still need to give the issues proper hearings, but national interest should be a factor in decisions relating to renewables.
	I now turn to my main comments on last week's Budget. The TUC called it
	"a sensible Budget for the overall economy, but something of a missed opportunity to make real progress to a fairer society",
	and I agree with that assessment. When the Chancellor was interviewed on the radio the morning after the Budget, he said:
	"We are where we are".
	I now think of it as the "We are where we are" Budget. That was really an admission that he did not have a great deal of room for manoeuvre in the circumstances. Those circumstances include a possible world recession owing to the crises in the American finance and mortgage markets and very high oil prices. Maintaining economic stability in the UK in the face of that is essential, so it was a holding Budget, and in many ways I understand why.
	However, when we consider where we are, we have to take into account the wasteful cost of the wars, including the war in Iraq, which contributed to high oil prices, and the unwise handouts given to private companies so that they can encroach on public services. That includes the almost £2 billion for the London underground that was wasted on Metronet. There has also been no proper check on the speculation by finance capitalists that engendered the current downturn. The horse has now bolted, but I still think there need to be controls on the credit and profits with which those finance capitalists can speculate.
	To come back to the point about encroaching privatisation in the public sector, I would say that there is a heavy cost attached to private finance initiatives. There was a report in  The Guardian online—I read it in my Library research fact sheet—headed "PFIs move offshore". It says:
	"Billions of pounds of private finance initiative...including the refurbished Treasury headquarters in Whitehall and the new Home Office, have been moved off-shore by their City owners to avoid paying tax on their profits.
	More than 50 PFI schemes have now been included in portfolios held in Channel Islands tax havens by three major PFI investment companies, HSBC Infrastructure, 3i Infrastructure and Babcock and Brown Public Partnerships"—
	not Prime Minister Brown, I presume. The article continues:
	"Once the buildings have been completed, up to 90 per cent. of the ownership of the UK-registered company running the PFI is transferred to the companies which are based in the tax havens. This means that the income and profits from running the PFIs will be free of UK tax for up to 40 years, depending on the duration of the PFI."
	If the people concerned are not to pay tax, that is a scandal that the Government must get to grips with. In addition, extortionate, exorbitant amounts are charged for any changes to PFI contracts, as was pointed out in a recent National Audit Office report. Millions are being charged. The contracts are not even being tendered; they go straight to the existing PFI contractor, and that has implications for the green agenda, because in time we will want to change the buildings concerned and make them more green-sensitive. The PFI contract owners will have us over a barrel and will charge what they like. The Treasury has to look at that aspect of PFI.
	I started with the issue of fairness and I return to it now. I support a non-dom tax on the super-rich who turn up to make profits out of Britain without living here. Such a tax is reasonable. However, the Chancellor said that he would look to close the loopholes. I have been in the House a long time and I have heard that said in virtually every Budget. As the TUC points out, big companies and the super-rich use plenty of loopholes to avoid paying their proper taxes.
	I refer the House to the booklet "The Missing Billions: The UK Tax Gap", which was written by the accountancy and tax specialist Richard Murphy. He looked at 50 top companies and says that their effective corporation tax rate is 22.5 per cent., not the 30 per cent. agreed by Parliament. He says:
	"The fifty largest companies almost always pay 5 per cent. less tax on average than they declare in their accounts."
	He goes on to say that in the seven years to 2006, those companies' effective tax rate fell by 0.5 per cent. each year. The leaflet shows how super-rich individuals avoid paying their fair share of tax and that £3.2 billion is lost by turning earned income into investment income, which is taxed more favourably, or by shifting the income to others, such as spouses, in lower or nil tax bands. Another £3.8 billion is lost because transactions are moved out of the UK; £0.5 billion is lost by turning income into a capital gain and £4.8 billion is lost from various kinds of tax planning.
	The leaflet says that half the amount lost to tax avoidance could raise the level at which the higher rate tax starts being paid by £10,000 a year. That would offer significant help to those on middle incomes. The same amount could increase the state pension by 20 per cent., reduce income tax by 3p in the pound or build an extra 50 hospitals a year. Half the amount lost to tax avoidance could do one of those things. The leaflet goes on to call, as does the TUC, for the introduction of a new "general anti-avoidance principle" to make it easier to tax the super-rich and the large corporations. I certainly support that.
	We have had a debate on energy companies, and I welcome the Secretary of State's response to my intervention about prepayment meters; I note that there is an iron fist in the glove on that issue. I certainly hope that there will be a requirement for energy companies to help vulnerable groups. Bearing in mind their high charges and high profits, those companies got off lightly in this Budget. One in six—more than 4 million—households in this country suffer from fuel poverty, and I am told that that number is going in the wrong direction.
	I turn back to the issue of the rich getting richer. The Fair Pay Network has produced an interesting report that points out that half of poor British children live in a working household. The report states:
	"Pay rates at the top of the labour market have become obscene. 54 billionaires who are based in Britain are estimated to have paid just £15 million in tax last year, on earnings of some £126 billion. Some 4,000 City employees were awarded bonuses of £1 million or more—and most will have found some way to shelter their riches from the 40 per cent. tax rate that should apply to them. YET: 1&frac12; million children in poverty belong to households that pay full Council Tax."
	The Government are right to use work as a way out of poverty, but
	"57 per cent. of poor households are working households, up from under a half (47 per cent.) a decade ago."
	The report also states that
	"the public sector remains the largest employer of low-paid workers aged 25 or over...64 per cent. of low-paid workers in Britain are women...Poverty in the UK has a female face, and we have the largest gender pay gap in the EU...a woman in Britain has a 14 per cent. higher chance of being in poverty than a man."
	It then makes the point that I mentioned earlier:
	"the total number of poor children in working households has stayed exactly the same in the last 10 years: 1.4 million."
	That record is not good enough for a progressive Labour Government.
	Before I come to how taxes are spent, I should say that I support the increases for boozers and smokers, as there are good health reasons behind them. However, progressive measures should not necessarily—or solely—be paid for through taxes on boozers and smokers. Those who have got millions in City bonuses should be paying a fairer share.
	There is much to be praised in the Budget: I like the £200 million in the next three years towards achieving the target that no school should have fewer than 30 per cent. of its pupils getting five A* to C grades at GCSE. That is a good measure that will help schools in my constituency of Leyton and Wanstead. I also welcome the boost to pensioner households from the rise in the winter fuel allowance. Furthermore, the pension credit rises to a guaranteed £124 for a single pensioner and £189 for a pensioner couple, and 6,000 pensioners are being taken out of income tax.
	However, Age Concern's parliamentary briefing is worth reporting to the House. It states:
	"there are still 1.8 million older people (17 per cent.) living in poverty in the UK...The Government have a target to end fuel poverty for all vulnerable households by 2010 which they have already had to acknowledge they will not reach. The trend is accelerating in the wrong direction: the number of older people in fuel poverty is likely to have more than doubled in the last 4 years alone."
	The organisation calls for a reversal of
	"last year's damaging cuts in funding for the Warm Front scheme."
	By the way, the Budget briefing for Labour MPs keeps stating, in addition to whatever is in the Budget, that there is free central heating for pensioners. There is no free central heating for pensioners. There is the Warm Front scheme, which is to be praised; however, that was cut back and people have to go through a lot of hoops to get it. Let us alter that briefing—or, better still, let us have free central heating for pensioners, if that is what we want. I do.
	Age Concern goes on:
	"Once again Council Tax Reform is notable by its absence. Council Tax has nearly doubled since 1997, whilst the Basic State Pension has only increased by 40 per cent."
	It also states:
	"The Government should act on Lyons' recommendations"
	that there should be automatic receipt of council tax benefit. That should be implemented as well.
	The briefing points out that there should be
	"a firm and steady date for the restoration of the earnings link in the state pension."
	I agree, and it should come sooner rather than later.

Kelvin Hopkins: rose—

Harry Cohen: I shall give way in a moment.
	As the briefing points out, if the Tories had not abolished the link in the 1980s and it was still in place, the basic pension would be £50 a week higher than it is today.
	Age Concern's final point is as follows:
	"The Government has promised to re-link the state pension to earnings by the end of the next parliament, but this is far too long to wait. Unless the Government intervenes, the real value of the basic state pension will fall to a dismal £81 (in 2007-08 earnings terms) by 2012."
	I give way to my hon. Friend the Member for Luton, North (Kelvin Hopkins).

Kelvin Hopkins: My hon. Friend has made my point for me.

Harry Cohen: Okay.
	I come to the last relevant issue, which is child poverty. This should have been the Budget to have made inroads into our target to eliminate child poverty. I welcome the £20 for the first child from April 2009, the rise in the child tax credit to £50, and the discounting of child benefit income in calculating eligibility for housing benefit and council tax benefit. The Chancellor said that that would take 250,000 children out of poverty. However, as the Work and Pensions Committee, on which I sit, has reported, 1 million children must be taken out of poverty to meet the 2010 target. That is pre-housing costs; after housing costs, there would be 1.5 million such children.
	I welcome the discounting of child benefit for council tax benefit and housing benefit, but why was that not set for October 2009, not April 2009 like the other changes? That will have an administrative cost for local authorities, and it will engender some confusion. I ask the Government to rethink that and put it back to April 2009 with the other changes. I welcome the increase in tax credits. More needs to be done, but that is also the case as regards in-work benefits, equal pay, a London living wage, and targeted benefit increases for families with someone who is disabled.
	This is a flawed Budget, although it has lots of good parts. It is a holding Budget for the economic situation in which we find ourselves, and a steady one in the circumstances. It is the best option on offer among the political parties. Interestingly, the Conservatives did not put forward a single proposal, and there is already talk of their leader flip-flopping on some of the commitments, or near-commitments, that he has made. Nevertheless, for Labour Members it still falls far short of what is required, while the money for war and handouts to private capital go unrestricted, with catastrophic and expensive consequences.

John Redwood: It has been interesting to be present at this debate, which is a bit like "Groundhog Day". We had a themed debate rather like it as part of the European scrutiny process, and we will doubtless have a similar debate on Second Reading of the forthcoming Climate Change Bill.
	We have seen the three Front-Bench spokesmen all tiptoeing towards the proposition that people should have to pay more for their energy but understanding, as politicians, that that is an extremely difficult thing to sell to them. We have three variants. The Government's view is that this is probably the least bad excuse to use for raising more money, because they are desperately short of money; Conservative Front Benchers are saying that green taxes should be entirely balanced by other tax cuts so that people would be able to afford them, assuming that the distribution was fair; and the Liberal Democrats are in their usual muddle saying that there is a bit of this and a bit of that, but undoubtedly wanting to tax people more—rather more, I suspect, than the Government.
	The tragedy of all this is that those who want to redistribute income cannot guarantee to do it effectively by this particular route. People on low incomes need access to energy and transport just as people on high incomes do, so the Government are driven back on proposals in the Budget to have a one-year increase in the amount of fuel payment assistance for pensioners. That goes a little way towards helping, and other methods will need to be developed if the political classes decide to carry on with accelerating the progress of the market and having ever-dearer energy. We have already seen in recent months a huge energy price signal sent by the big increase in oil prices and the attendant changes in gas prices, coal prices and so forth. If the political classes want to accelerate that process even further by separate carbon levies, carbon trading with artificial prices and other regulatory and tax costs, more work will have to be done on how to do something about the fairness of distribution of those tax rises and cost rises, and there will have to be ways of offsetting those so that people on low incomes do not feel that they are taking a disproportionate share of the burden and are the ones who are deprived of transport and home heating.

Kelvin Hopkins: The right hon. Gentleman seems to be putting forward a rather socialist message, which I welcome, in suggesting that tax should be progressive rather than regressive. What about taxing the rich a lot more and insulating poor people's houses?

John Redwood: I think that the hon. Gentleman knows me well enough to be aware that that is not my view of the world. More people can be got out of poverty and into work by moving generally towards lower taxes than towards higher taxes. However, I was making a specific point on the content so far of today's Budget debate and reminding all those involved in policy formation that one cannot simply carry on with the idea that extra taxes, extra levies and extra regulatory costs can be heaped on to energy without having consequences not only on the rich but on the poor and without needing to have some kind of alternative package. If we are not careful, we just end up with massive administrative churn costs because of the imposition of a lot of administrative costs in raising the levy, the charge and the tax, and then a lot more administrative costs in giving money back to people so that they can afford the levy, the charge and the tax, and we do not achieve what we are trying to achieve. I rather like green promotion in the form of lower taxes for better behaviour. It is good that we have already heard that that worked, as it did very quickly, when we did it for unleaded petrol, which showed that people prefer an incentive to tax increases.
	It is important that people listening to our debates, as I hope that some still do, understand that we know that a very big financial crisis is under way in the world and that that crisis has moved on at breakneck speed during the course of the Budget debates. We heard a few brief remarks from the Prime Minister in his statement earlier, but we have not yet had the benefit of Treasury Ministers explaining in this House how they responded to the Bear Stearns catastrophe and the rescue that has been mounted so quickly and successfully in the United States of America; nor have we had from them proper comment on the actions being taken to co-ordinate putting liquidity into markets and seeing the market through the crisis.
	In the Budget speech, the Chancellor rightly had a paragraph or so of reference to the world financial background, explaining that it was bleak, but he claimed, with a hint of complacency, that the UK is uniquely best placed to deal with this crisis. We should try to ensure that the Chancellor and his colleagues have thought through the gravity of the world situation in which we find ourselves and the way in which, in some circumstances, the UK is not uniquely well placed but has its own home-grown problems, which we need to take very seriously. After all, it would be foolish to be complacent given that it was the United Kingdom that had the first run on a retail bank—and, I am pleased to say, the only run; let us hope that it turns out to remain so—whereby retail depositors were so worried that they were rapidly pulling out their deposits, which is what finally triggered the intervention and action over Northern Rock. Bear Stearns is a different kind of run by a different type of investor and depositor—equally lethal but not as telegenic and not affecting people on low incomes as the Northern Rock run visibly and clearly did.
	We should ask why, over that long and difficult, and rather cold and wet summer, the British authorities were unable to take pre-emptive action of a kind that might have prevented the Northern Rock crisis from developing as rapidly as it did. I am not jogging backwards—I was writing and saying this at the time. It was clear to the markets in London in August, if not July, that there was not enough money in circulation, and clear to those watching the markets that there was the potential for a financial disaster or a banking problem. I did not write down the names of the banks that were being mentioned at the time, but Northern Rock was the one that people most feared for, and it was widely rumoured in the markets. It would have been crass to mention it because the last thing that one wants to do is to play any small part in helping to undermine an important institution, crucial as Northern Rock has been to the success of the north-eastern economy and crucial as it is to all the small shareholders and depositors particularly concentrated in the Newcastle and wider north-eastern region.
	The Bank of England was placed in an extremely difficult position in August and September. The reforms of 1997 had left it ill-placed to understand the nature of such a banking crisis and to be able to respond positively to it. My first recommendation is that the Chancellor urgently look again at the regulatory and banking control framework that he inherited from the 1997 reforms and that he come to this House rapidly to introduce proposals for their improvement and updating.
	A central bank is more than a regulator. A good central bank is more, even, than a hands-on referee in a free-flowing game. It is a player in the money markets that it has to supervise, and has to keep liquid, honest and successful. The problem for the Bank of England in August and September, when the money market participants could see that there were difficulties, was that, since 1997, it has lacked two important flows of information that most central banks regard as normal. First, a central bank needs to know everything that the Government are doing.
	The Government are usually one of the biggest operators in the money market—particularly a heavily borrowing Government like the present one—and the timing and nature of debt that the Government issue is crucial to the functioning of the market. In 1997, the then Chancellor nationalised the function of running the Government's debt by taking it out of the Bank of England and putting it into the Treasury. The modern Bank does not have the same minute-by-minute detailed sight of or responsibility for Government business in the market that it had prior to 1997.
	The second big problem that the Bank of England has is that prior to 1997; it was the day-by-day banking supervisor of all commercial banks, particularly the main credit-creating clearing banks that run our system. The Bank could see all of that business, and knew about it day by day, hour by hour and minute by minute. It had a close relationship with those banks—the famous Governor's eyebrows would rise wisely or angrily if anything went wrong. The Bank knew whether they were liquid enough, whether they had squared their positions early enough in the day and whether they were taking a sensible position in the markets, so the banking system worked well.
	That responsibility was lifted from the Bank and given to the Financial Services Authority, and is now handled through a tripartite arrangement with the Chancellor and the Bank of England. When the crisis struck, it was always likely that it would be more difficult to control and resolve because the principal central bank player did not have all the regular information or history and knowledge of marketplace activity that a central bank should have. That is why I warned, in an economic policy report that I wrote for the Opposition, that we had a weak structure in Britain, and that when there was a financial difficulty—I did not forecast Northern Rock, but I had something like that in mind—things would go horribly wrong because the Bank no longer had those important powers.
	The next curious matter is that just prior to the run on Northern Rock, the tripartite system clearly misread the situation very badly. Both the Chancellor of the Exchequer and the Governor of the Bank of England made fierce speeches in which they said that the banking system in Britain had made lots of mistakes by lending too much money to the wrong people, and that it had to meet the consequences of those mistakes—there would be no bail-outs. That would be a heroic thing to say at the best of times; in practice, no Government can allow a major bank to go bust in our global system because many poor and rich people would suffer badly, and there could be a systemic crash throughout the world. It was particularly odd, however, to make such statements when they must have known that they were on the verge of a difficult crisis over Northern Rock, with a possible run on the bank. They had to eat their words a matter of hours later when the run got out of control and the Chancellor said not only that he would guarantee all the deposits in Northern Rock—big though that task was—but the deposits of any bank found in a similar position, leading some to speculate who else in the markets he might have in mind. There was a worry that the run on Northern Rock would lead to a run on other institutions, which there is no need to name here. It is good that we are through that part of the crisis, that there is such a guarantee and that the tripartite system understands that it has to stand behind the banking system.
	The guarantees, offers made and the nationalisation of Northern Rock now going ahead have not solved the problem, however. We are now in what some call the second leg of it. I do not think that the problem has legs; it is a continuing problem that will take some time to resolve, and we have just had another nasty chapter in the story—or drama, if you like—with the collapse of Bear Stearns on the other side of the Atlantic.

Henry Bellingham: My right hon. Friend speaks with a great deal of expertise, but would he agree that one of the interesting features of the scenario is that the business models of Northern Rock and Bear Stearns had one item in common? The level of deposits in both were low compared with the amount of money lent out to customers and the wider market. However, in the American case, the Federal Reserve intervened incredibly quickly and expeditiously, without any fuss at all, which stands in stark contrast to what happened here. In this country, the taxpayer, as my right hon. Friend rightly points out, is still heavily exposed.

John Redwood: The speed of reaction shows an important contrast. I am pleased that the Bear Stearns rescue took place as quickly as it did because the scope for further collapses and bear raids on other American banks was considerable, and it is good that the American authorities responded strongly and positively because there would have been knock-on effects across the Atlantic on British institutions.
	The American authorities are behaving rather differently from those in the UK. The American authorities believe the crisis to be so serious that they need to do two things: first, they need to keep driving interest rates down, and secondly, they need to continue making large sums of money available to keep the banking system liquid. In the UK, the authorities seem reluctant to move interest rates down because of the persistent but historic inflation we have to live through because of past monetary excess and difficulty, and they are making little money available—although they do occasionally make a co-ordinated effort to help to keep the banking system a little more liquid, as we saw in recent days. We need to ask why the matter is being dealt with in different ways, and which is right.
	Critics of the Americans say that it is crass to lower interest rates because there is still an inflationary problem, and they go on to say that lowering interest rates will not make any difference because it is not that kind of crisis. Of course lowering interest rates makes a difference; the crisis is due to the fact that some people cannot afford to pay the interest on their debt and repay their loans. If the cost of the loans is lowered through a lowering of the general interest rate—a lot of the loans are linked to that rate—the process would be a bit easier. Some people will not go bust and some will still be able to afford their homes.
	It is a bit odd that people are down on sub-prime lending. I would have thought that some in this House would have been overjoyed that people had come up with a way of letting the poor buy a home. Is that not rather a good thing to have done? It is a great pity that the process was overdone and that those involved did not back off sooner and realise that they needed controls that were a bit tighter, but we do not want to bring the whole edifice down and say that poor people can never borrow money to buy a home. Surely it is good news if the lower interest policy in the United States can see some people through this difficult period.

Martin Horwood: Is not one of the problems with the sub-prime business model that it factors in the cost of debt recovery? In other words, it is based on an assumption that many of the people they are targeting will not be able to afford the repayments that they are being offered. Does that not border on the immoral at times?

John Redwood: All banking factors in the probability that some people will not be able to repay. There is not one single sub-prime business model, but lots of different business models for those making loans to people who are a bit hard up. Of course making loans to those who are hard up is more difficult than making loans to those who are rich, but there are not enough rich people, and there are not enough rich people who want to borrow, so it is necessary to lend quite a lot of money to those who are hard up. The art of banking is in deciding how much one can offer and under what conditions. If the authorities can see more of those poor people through by making sensible interest rate adjustments, I say, "Thank goodness for that", rather than, "Serves them right—let's keep the interest rates high, push more of them under and put them back into the trailer park." That is not a particularly nice thing to do.
	Will the policy be inflationary? I find it difficult to understand how people can say that the American authorities are irresponsible to cut interest rates because that will cause inflation, while at the same time they say that America is already in recession—a questionable proposition—and that it will have a hard landing in a very bad recession. If America is going into a bad recession, bankruptcy, unemployment and falling prices, not inflation will be the problem. The crash in house prices will extend to other goods and assets. I am therefore in favour of lowering interest rates in the conditions that we are considering to try to save something from the mess.
	Should more money be made available to the banking system? The answer is simple: of course it should. Whatever people think of bankers—I know that several hon. Members are not best friends with bankers or have various political causes on which to fight them—one cannot live in a modern, sophisticated economy without them. We need people who assess risk, make loans and so on. If they get it catastrophically wrong and we push them all under, we simply make our lives worse, too. There must be moderation in the response, and understanding that we must see enough banks and lending through the crisis so that, if we handle it properly, normal life can be resumed and reasonable economic growth can continue. Money must therefore be made available to the banking system.
	That brings me to my next policy recommendation to the Government. One reason why UK authorities cannot do much to make the system more liquid is that too many of the resources of the Bank of England and the Treasury have been expended on nationalising Northern Rock. The sooner the Northern Rock position is unwound, the better because our nation and our monetary authorities cannot afford to have so much tied up in a single, medium-sized—by international or even national standards—mortgage bank. Although the sum of money is small in world financial markets, it is large to the British taxpayer and the Government, and certainly to the Bank of England.
	When the Bank of England mounted its rescue of Northern Rock, the former was only 40 per cent. of the size of the latter. It was therefore impossible for the Bank of England to mount a full rescue by itself and that is why—I presume—the Treasury got involved and there had to be proper Treasury guarantees and promises. Taking on something the size of even Northern Rock—a relatively small bank by international standards—required the whole weight of the consolidated fund of the UK and the Government's money-raising powers. The Government therefore need to accelerate the process of either running off the business or developing new business under whatever model the managers can devise so that we get the £25 billion back as quickly as possible. The Bank of England would thus have a better profile of assets and liabilities again, and more money with which to play in the markets.
	In the meantime, perhaps the Government should consider the financing of the Bank of England money market operations, because I do not believe that it is playing with enough money, and it needs to have a bigger cash reserve available to keep the banking system more liquid during the difficult times. It will not be easy. I am an optimist and I believe that we can get to the other side, but it will require a more intelligent approach by the British authorities than they employed in August and September, and more weaponry in the form of lower interest rates and cash availability in the UK, just as enormous firepower is required in the United States as it, in the eye of the storm, tries to make its way through it more quickly.
	The general problem is over-indebtedness worldwide, especially in the American, British and similar economies. The good times were a period of easy credit, when the authorities on both sides of the Atlantic kept interest rates a bit lower than was sensible and either encouraged or turned a blind eye to the most massive build-up of debt under new types of debt obligation and debt structure, which we had not previously experienced. In a way, the regulators fuelled much of that. The Basel rules of capital adequacy told all sensible banks that wanted to grow quickly and increase their profits, "Do so off balance sheet." The rules encouraged—in a way, forced—them to do that. Surprise, surprise, the banks went for massive off-balance-sheet financing.
	Now, many in the Government and elsewhere have become critical and say that perhaps off balance sheet was overdone and not properly appraised and controlled. However, the Government are up to their neck in the off-balance-sheet operation because they are the biggest exponent by a mile of such financing in the UK. In the Red Book, the Government show roughly £500 billion of borrowing for the state in an economy of about £1,300 billion. The Government state that they are keeping their debt to around 40 per cent., which is the target that they set themselves.
	When I last did the sums and considered the UK in the way in which a finance director would have to examine it to stay out of jail when reporting, rather than by using the Government's method, I concluded that the British state's true indebtedness is £1.3 trillion—£1,300 billion or 100 per cent. of GDP. I reached that conclusion because of the huge unfunded pension liabilities and the large pension deficits in the state sector, the private finance initiative and public-private partnership obligations, publicly owned companies, such as Network Rail, whose debt should be part of the state sector, and now, of course, the full consolidated sum for Northern Rock. Just as Northern Rock consolidated the whole of Granite, so the Government, having acquired Northern Rock, should consolidate the whole of it.
	There is, therefore, a large debt on the state sector books, but much of it is suppressed from the general public gaze because of the accounting conventions that the Government deploy, which are so different from those that are required of the private trading sector. The Government need to start reducing their debt burden and demonstrating that they are serious about helping to unwind the debt crisis, taking a different attitude to PFI, PPP, off balance sheet and guarantees of trading companies, into which they entered so liberally in recent years. That would send a good signal and create a bit more financial capacity, which would help the state sector in all sorts of ways. It would help not least the money market, which would have a little more leeway if there are squalls ahead in the private banking sector, which need liquidity or financial instruments to be traded in open market operations.
	The Budget was the most extraordinary non-event because it dealt with moving a few hundred millions around in a £1,300 billion economy. I am happy that the elderly will get a bit more help with their fuel bills. One would expect a Secretary of State or a Minister from the relevant Department to make such a statement. One would also expect it to be a good news item. However, Budgets are about influencing the general direction, shape and size of the British economy. If a Chancellor currently wishes to make a decisive impact, the Budget must move around £7 billion, £10 billion or £15 billion. Several billions must be involved if the Chancellor is to have any impact other than a nice warm glow and a few pence in the pockets of a target group that he may wish to woo on Budget day.
	The Budget was pre-empted by the supplementary estimates that went through the House last autumn and, more recently, last Monday. From memory, the supplementaries added up to an astonishing £22,000 million of additional spending. Some of that may be good spending and a little of it may be policy change, but most is testament to the fact that the Government have lost control of their public spending. They tell us one thing on Budget day about what they will do and the balance between spending and revenue, then, towards the tail end of the year, in November and March, they set out colossal sums of money and say that, Department by Department, quango by quango, by big or little numbers, huge overruns have occurred. The figures go through automatically, without debate, yet they are far more significant—they will make an impact on the economy—than the measures mentioned in the Budget.
	I therefore recommend to the Government that, to try to get the British economy through the extremely difficult period in world finance, we need proper expenditure controls, Department by Department. We also need the side of the Treasury that the Chief Secretary leads to have much more of a grip on and daily information flow about what is happening and what is going wrong in order to intercept the overspends earlier, emphasise that they are unacceptable when it is still possible to do something about them and redouble the efforts, which are stated to be part of the Government's policy in the Budget, to root out the abundant waste, inefficiency and incompetence.
	We are now at the point where over-borrowing and indebtedness in the public finances are so gross that we need a complete staff freeze at the administrative grades. That should not apply to teachers, nurses and doctors, of course; indeed, we need to continue recruiting as many as we can afford. The general civil service and the quangocracy, however, is now extremely bloated. We need a control on numbers and we need to start slimming them down by natural wastage. I do not want to fire people—that is expensive and unpleasant, and not a nice thing to have to do—but I want to start shrinking the numbers on the public payroll quickly.
	We need pension reform for new people coming into the public sector at all levels, because the gap between public and private pension costs is extremely in favour of high-cost public sector provision. Above all, public sector pensions will be difficult to afford in the years ahead and are swelling the big deficit on any accurate and honest balance sheet, if we were ever to get one from the Government.
	We also need proper control over the use of management consultants and outside advisers of all kinds, which has got completely out of control. We need proper controls over the use of property. It would be a good idea to spend to save on energy, which is topical, given the theme of this debate. We just need professional management, Department by Department, which can start to flush out the excess billions of waste, incompetence and overrun, which the supplementary estimates pick up year after year, but which get so little debate or reporting.
	That is a series of positive proposals for a nation battling with a world financial crisis, elements of which are made in Britain, and where parts of the British predicament make responding that much more difficult. I hope that the Government will listen seriously on the need to reform their handling of money markets before there is another disaster or mess. We cannot afford another one, and it was a very expensive rescue that had to be mounted. I hope that the Government will start to tidy up Northern Rock lending as quickly as possible, because that is money that we could not afford to have outstanding, and there are easy and simple ways of getting quite a lot of that money back more quickly.
	I hope that the Government will realise that every penny in those supplementary estimates will be borrowed, because nobody came to the House and said, "We've had £22 billion of supplementary estimates, so we need £22 billion of extra taxation." We should at least be thankful for that, but there should not have been £22 billion of extra spending. We need to get to grips with that and start rolling back unnecessary spending, so that we can have the Government under some control again.
	Above all, we need the Government to understand that although there is too much borrowing and some of it has to be squeezed, that means doing something at home, in the Government account, as well as just blaming private sector banks in America. It is partly the Government, by going along with the over-borrowing, the off-balance-sheet routes and the clever financing, who have helped to fuel the very crisis that they now say we can ride out more successfully.

Keith Vaz: I am delighted to take part in this debate on the Budget resolutions. I am pleased, too, to follow the right hon. Member for Wokingham (Mr. Redwood), who entered the House when I did, in 1987. We have both aged gracefully together and we have both acquired spectacles, although he has kept some of his hair. I am afraid that mine has disappeared. Perhaps he spent a little longer in government than me, and perhaps that is why he was able to survive.
	I want to praise the Chancellor, because I thought that the Budget was excellent. I am not one of those who feel that he ought to be more of a fun character. There was some press speculation after the Budget asking why he is so careful, and some people even suggested that he may be boring. However, I would much rather have a Chancellor like that than one who walks around with his face painted and a balloon attached to his lapel, ruining the Government.
	The Chancellor gave us the right Budget for the right time. This is a time of great instability, as the right hon. Gentleman correctly said. Goodness knows what is happening to the global markets or the economies of other countries. It is right that we should have a carefully measured Budget to deal with the situation that we face.
	The Chancellor was right to take the stance that he did in protecting and preserving Northern Rock. The right hon. Members for Wokingham and for Ross, Skye and Lochaber (Mr. Kennedy) will remember the closure of the Bank of Credit and Commerce International, the sixth largest private bank in the world, on 1 July 1991. The then Chancellor of the Exchequer, Governor of the Bank of England and Prime Minister—I am not sure whether the right hon. Member for Wokingham was in the Cabinet at that stage—made the decision to close BCCI.
	The bank is still in liquidation, 17 years later. People lost a great deal of money, because in the aftermath of BCCI's closure, the then Prime Minister, John Major, told everybody that it was completely bankrupt and that there was no money left. However, 87 per cent. of the money has been found and the depositors have been paid back most of what they had, although many have suffered greatly because it took so long to pay them back. The bankers—the employees—have found it difficult to find employment. A repetition of the catastrophe that was the closure of BCCI was avoided by the Government. The Chancellor was right to do what he did on Northern Rock, and I am glad that he took that action.

Kelvin Hopkins: May I strongly reinforce what my right hon. Friend is saying? I have a constituent who was an employee of BCCI who lost not only his job and his income, but his home, because he had a mortgage with the bank. He had a terrible time with ill health after that and the whole family suffered because a rescue was not put in place. Had he been even partially recompensed, he would have had a much better life.

Keith Vaz: My hon. Friend is absolutely right. In fact, he wrote to me about the case and I suggested that he write to the then Secretary of State for Trade and Industry, because the Insolvency Service was part of the old Department. In raising BCCI, I simply point out that the Government adopted the right approach this time. Of course it has cost the taxpayer a lot of money, but the alternative would have been catastrophic.

Geoffrey Cox: Surely the right hon. Gentleman is not comparing BCCI to Northern Rock. BCCI was riven with fraud from top to bottom, but Northern Rock is not in that situation at all. There was no option but to close BCCI, but there should have been swifter action to deal with Northern Rock.

Keith Vaz: The hon. and learned Gentleman is new in coming to the House and is therefore unaware of the campaigns that were prosecuted for two decades. BCCI was not full of fraud. If it had been full of fraud, the money would have disappeared. If he would listen to me, I just said that 87 per cent. of the money was in the bank. If he recalls the time—he is younger than I am, so he was probably at school—

Geoffrey Cox: I defended some of the people who were responsible.

Keith Vaz: Yes, there were some people involved, but that applies to any bank. However, the bank as a whole was not full of fraud, because 87 per cent. of the money has been found. The rest of the money found its way into the pockets of liquidators, who still proceed to liquidate the bank. That was the right approach. Whether there was some element of unsavoury activity—the hon. and learned Gentleman had clients at BCCI whom he defended—the fact remains that if Northern Rock had been closed, the consequences for those employed and those with mortgages would have terrible, and we would be hearing about what was happening to them year after year. Indeed, if Northern Rock was called "Southern Rock", the attitude of right hon. and hon. Members on the Conservative Benches would have been quite different.
	I am pleased that the Chancellor put 4p on a pint of beer, 3p on a pint of cider, 14p on a bottle of wine and 55p on a bottle of spirits. That is partly because I do not drink alcohol, so the increases do not have a direct effect on me, but also because that was the right approach to take if we are to be serious about the health of the nation, as was the decision to put up tax on cigarettes and cigars. As the House knows, 50 per cent. of crimes in this country are alcohol-related. The Select Committee on Home Affairs has just begun an inquiry into the number of crimes committed by those under the influence of alcohol. What has shocked us in the evidence that we have received so far is the universal wish of the victims of such crimes for the Government to do more to tackle the availability of alcohol.

Kelvin Hopkins: I strongly agree with my right hon. Friend. Would he like to see an even stricter regime, perhaps involving a minimum retail price for alcohol based on its alcoholic content, and stricter measures to control the flood of cheap alcohol coming in from the continent of Europe?

Keith Vaz: My hon. Friend again anticipates me; he is absolutely right. I shall talk in a few moments about supermarkets and about what happens on the other side of the channel.
	Alcohol consumption has been rising steadily for the past 15 years. Figures suggest that one third of men and one fifth of women drink more than the recommended level each week, and alcohol-related deaths have more than doubled since 1991 to over 8,700 a year. The British Medical Association has stated that a 10 per cent. rise in price could cut such deaths by up to 30 per cent. Evidence from Finland suggests that that could be right. A 33 per cent. cut in excise duty there in 2004, introduced to deal with cheap imports, led to a 17 per cent. rise in alcohol-related mortality. We therefore welcome the Chancellor's decision not to reduce the price of alcohol.

Martin Horwood: Would the right hon. Gentleman have liked the Chancellor to differentiate more between beer—on which it is quite difficult to get drunk very fast—and spirits such as vodka and rum, which are used in the mixer drinks that seem to be causing a lot of the problems? I suspect that the same would have been true in Finland.

Keith Vaz: As I have said, I am not an expert on beer drinking, but I have seen many people get very drunk on beer. People can get drunk on beer, although I have never had the pleasure—perhaps I should not call it a pleasure—of being in that position. I understand the hon. Gentleman's point. The Chancellor has not differentiated in that way, however; he has put the price up on all of them.
	One of the witnesses to appear before our Committee will be Helen Newlove, whose husband was murdered in an horrific attack by youths who had been drinking heavily. Only last week, while launching a campaign called "Mothers in Arms" in  The Sun, she urged the Government to do more to stop people drinking to excess. The British crime survey of 2006-07 revealed that 46 per cent.—nearly half—of all violent crimes were believed to have been committed under the influence of alcohol. That figure rose to 58 per cent. in cases of attacks by people unknown to the victim. In more than 1 million violent attacks, the aggressors were believed to be drunk. I therefore very much welcome what the Chancellor has done.
	There is, however, an area in which the Chancellor could do more. I am pleased to see my hon. Friend the Member for Wallasey (Angela Eagle) on the Front Bench. I believe that her title is Economic Secretary to the Treasury.

Angela Eagle: Exchequer.

Keith Vaz: The Economic Secretary to the Exchequer?

Angela Eagle: No, I am the Exchequer Secretary to the Treasury.

Keith Vaz: Great! I am glad that I have now caught up with the recent changes to the Government's lists.
	The Government should do more in respect of what my hon. Friend the Member for Luton, North (Kelvin Hopkins), as well as the chief executives of Tesco and Asda, have said. I am not normally in agreement with the chief executive of Tesco, bearing in mind the huge Tesco store that was created on the north-west side of my constituency and the fact that it does not always collect its trolleys on a Friday. However, he, and the chief executive of Asda, were right to say that the availability of cheap alcohol—which is virtually given away in supermarkets, although it is not entirely free—means that young people can either go in and buy it, or get other people to go in and buy it for them. I am afraid that the number of prosecutions of people involved in such activity has been very small. It is not just a question of putting up the tax on alcoholic beverages; we must also look at the role of supermarkets and other retailers.
	I commend the Chancellor's proposals on pensions. The decision several years ago to raise the state pension by, I think, either 1p or 10p remains a blot on the history of this Government. That was a terrible error of judgment. The measures in this Budget are the right thing to do, however. It is right to raise the winter fuel allowance from £200 to £250, and from £300 to £400 for those over the age of 80. That is exactly the right approach to dealing with spiralling energy costs. It was right, too, to increase child benefit to £20 a week and to bring that forward by a year.
	I shall not spend much time dwelling on the environmental aspects of the Budget, partly because the Secretary of State for Environment, Food and Rural Affairs made such an eloquent speech that there is no need for me to repeat everything that he said. I very much agree with what he said, and I am glad that he had the opportunity to put forward those views. Like all hon. Members, I am deeply concerned about climate change, and about what Governments such as ours can do on their own without the support of economies such as India and China. My hon. Friend the Member for Middlesbrough, South and East Cleveland (Dr. Kumar) is the chairman of the all-party British India group. It is all very well to say to the Indian and the Chinese people, through their Governments, that they have to control their growth, while we—and the United States in particular—continue to do what we are doing and to make the ozone layer even thinner and the hole in it even bigger.
	This Government are taking the right approach to climate change. I drive a Toyota Prius. I have done so for the last eight months, and I am glad that I bought it before all the Budget changes. I am sure that many people will now be rushing to buy these green cars. It also saves me a lot of money because I do not have to pay the congestion charge. I am not a walking advertisement for Toyota, but I believe that it is important that other car manufacturers follow its lead. The choice of such vehicles on offer at the moment is not that great, as we can see when the ministerial cars rush into Speaker's Court. Unfortunately, I have got into the wrong car once or twice, believing it to be my own, and surprising the Minister sitting in the front seat. The choice of such vehicles should increase greatly, to allow more opportunity for people to buy them.
	This is an excellent Budget. It is the right Budget at the right time, given by the right Chancellor, and I wish the Government well in ensuring that it passes through the House without difficulty.

Henry Bellingham: I am sorry that the right hon. Member for Leicester, East (Keith Vaz) got into the wrong car. His story reminds me of ministerial retirements, when the former Minister gets into the car but nothing happens. At least the right hon. Gentleman got into his own car eventually and drove off. It is always a pleasure to follow him in a debate. I listened to his maiden speech, and he has always been an assiduous campaigner on a number of issues. He touched on many different aspects of the Budget today.
	I want to focus on two subjects that affect my constituency deeply. One is small businesses; the other is the plight of pensioners. As many of my colleagues have pointed out, this Budget was memorable for being very boring, and for having a great deal hidden away. For example, one of the most significant parts of the Budget was not even mentioned by the Chancellor in his Budget speech. That was the raising of the earnings ceiling for national insurance by £100 to £770 a week, which will mean that anyone earning more than £40,000 will pay an extra £520 a year. That stealth tax has been hidden away, and I wonder how many other horrors are lurking in the fine print. Perhaps this is not surprising, however, given that this country has the largest budget deficit in western Europe.
	It is tough out there for small businesses at the moment. The report produced by the British Chambers of Commerce in March 2008 stated on page 5:
	"Small firms will be particularly vulnerable in an environment in which lenders become more risk averse. Even if official interest rates fall, small firms may find it harder and more expensive than in previous years to borrow. If you add these factors to the UK's growing regulatory burden—the cumulative cost of new regulation to business since 1998 is now nearly £66 billion—then SMEs are going to find it tougher to grow in the coming year."
	The most recent quarterly survey of the small business trust looked into the barriers to growth, which are consistently cited by small businesses as taxation, employment regulations and business rates. It states:
	"For small micro-businesses, taxation is clearly the priority, followed by increased concern over late payment and bad debt. The small businesses employment regulations remain the main barrier to growth, then taxation."
	Unfortunately, although on examination the Budget contains some small plus points for small businesses, at a time when those businesses are facing many serious challenges those plus points are not nearly beneficial enough to wipe out the minus points.
	Of course we welcome the further £60 million allocated to the small firms loan guarantee scheme—an excellent scheme, brought in under the previous Conservative Government—which will support a 20 per cent. increase in lending. We also welcome the £12.5 million from the Treasury for a venture capital fund to back women-owned businesses. Furthermore, there is a new £30 million enterprise capital fund to help provide debt and equity finance for small and fast-growing businesses. The Chancellor, in common with previous Chancellors over the last 10 years, has said that the Government are now going to make a real effort to bear down on regulation. Well, we have heard that before. We are also to have a review of Whitehall procurement to see how the 30 per cent. procurement figure can be reached by small businesses.
	All that is positive news, and although we are talking about a few tens of millions of pounds here and there—I do not begrudge it—those measures pale into insignificance when compared with the £1 billion hit that small firms will have to take as a consequence of the increase of 21 per cent. in the small firms corporation tax rate. We also need to compare any positive changes with what is happening on the capital gains tax front. CGT on business assets, as announced last year, is going up by 80 per cent. to 18 per cent. Despite the new entrepreneurs relief scheme announced by the Government, that is still very bad news indeed.
	Small firms also have bearing down on them like an express train the Government's plans to hit income shifting or income splitting. Of course I welcome the delay until next year and the fact that there will be further consultation, but surely after all the Government have done to try and encourage husband and wife businesses and small businesses to incorporate, that is exactly what the Government should not be doing.
	I am also very concerned, as is the whole small business community, about the plans announced in the Budget fine print to give tax inspectors the right to turn up unannounced to demand records at a premises without an official warrant. I find that very disturbing. I know that the Government are very keen to give tax inspectors the same powers as customs officials, but they perform very different roles. Customs officials can, quite rightly, bug telephones to intercept letters and e-mails in the fight against drugs and gun crime. I believe that giving tax inspectors this power of entry without an official warrant will undermine trust and confidence in the small firms sector. When combined with the Government's other plans to require banks, building societies and other third party operations to hand over customer records, we clearly have a recipe for the destruction of confidence in this sector and a worsening of its relationship with the Government.
	Small businesses face many particular and difficult challenges in rural areas, so will this Budget help them at all? It may provide a small amount of help at the margin, but it certainly will not help those post offices whose closures are due to be announced later this week. In my constituency, there may be 17, 18, 19 or 20 small post offices closing, in addition to the dozens that have already closed in such areas and in addition to those already closed in towns under the Post Office urban renewal scheme.
	We now hear in today's press that sub-postmasters will not get compensation if they offer within one year lottery or bill payment services or set up private mail or courier services. If they offer those services, they will not receive the compensation, which I find quite disgraceful. I am sure that Opposition Members who represent rural constituencies will feel the same—[Hon. Members: "Hear, hear."] Why are the Government restricting the trade of sub-postmasters when all they have left is their village shops and of course they want to offer other services?
	I feel very strongly that it is not just post offices, but other businesses in rural areas that are suffering. Let us consider pubs or public houses, which are so often the focal point in villages. Up and down the country, 56 pubs are closing every month. They are being sold off for housing or for development and they are faced with many problems arising from the smoking ban, the availability of cheap drink in supermarkets, the impact of the breathalyser and so on. I am not saying that we should not have had some of those changes, but now is not a good time for the Budget's increases on beer, wines and spirits, which will hit pubs disproportionately and put extra pressure on public house trade.
	If I look around my own constituency, I can find umpteen examples of pubs that have closed over the last few years. The Hogshead in King's Lynn high street closed recently, and in today's press, the Woolpack in the same town is reported as saying that trade is down by a third. There are many other examples of pubs threatened with closure, although there are one or two brighter lights. I opened a new refurbished pub last Friday—the Crown in Middleton, which has been bought by an entrepreneurially inclined publican who has three gastro-pubs. He has done a complete refurbishment in that pub and I was extremely impressed by the work he put in. I have no doubt that, with his determination and the staff's commitment, that pub will be a great success. On the other hand, the outlook is bleak and it will only get worse, thanks to the changes announced by the Chancellor in the Budget.
	What about the elderly and pensioners in our constituencies? The hon. Member for Nottingham, South (Alan Simpson) made an excellent speech on that subject and his arguments were reinforced by the hon. Member for Leyton and Wanstead (Harry Cohen). Much of the very good work done by the Warm Front initiative has now been undone—so much so that 4 million households now face fuel poverty.
	Many pensioners in my constituency—and in the constituencies of my hon. Friend the Member for Leominster (Bill Wiggin) and my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox)—are trying to budget more efficiently with pre-paid meters, but are penalised for doing so. That needs to be looked into further. I certainly agreed with the hon. Member for Nottingham, South when he said that the winter fuel payment increases were welcome, but were certainly not likely to make up for the continuing increases in fuel prices.
	There is one other measure in the Budget that many pensioners in my constituency will find very difficult to understand—the abolition of the 10 per cent. income tax band, which will have a serious impact. Many pensioners who retired before 65 and are on modest incomes of between £5,700 and £16,500 will be seriously disadvantaged. On an income of £10,000 in 2007-08, they would pay £782 in tax, but the abolition of the 10 per cent. tax band will mean such a pensioner having to pay about £150 more. That is a lot of money for people on fixed incomes. Those are the same people who have been subjected to year-on-year inflation-busting increases in their council tax bills.
	I do not blame Norfolk county council, the main precept raiser in Norfolk, as it has been asked to provide many more services and functions with less Government grant. It has been asked to take on those commitments and it is providing those services, but it has been faced with the invidious choice of either cutting services or putting up the council tax. It has gone for modest council tax increases, but year on year, those are inflation-busting. Of course, the increases will hit hardest of all those people on fixed incomes.
	In my constituency, those people—the pensioners in particular—will also be hit by the closure of post offices. They have been hit, too, by the increase in motoring costs. Often, their one luxury is going down the pub. That is also being penalised, so their quality of life is deteriorating, but we heard nothing in the Budget that will put their minds at rest, certainly as far as the council tax is concerned. Therefore, I urge Ministers and the Secretary of State to consider devising a scheme to give pensioners a discount on their council tax. That is what my party offered at the last election, and indeed at the election before that. We offered a straightforward non-means-tested discount to pensioners, because we felt the council tax was simply far too great a burden for many millions of people up and down the country.
	This has been an interesting debate so far, and it goes on, but as a number of my hon. Friends and Labour Members have pointed out, we live in frightening times. A characteristic of the 2008 Budget is giving with one hand and taking away with the other. Yes, the Government have tried to be green, but the hon. Member for Nottingham, South demolished their green credentials. I hope that I have shown that their small business credentials do not add up to a row of beans. Furthermore, there is little joy for pensioners.
	Earlier today, the Prime Minister talked about regulating sovereign funds. Is it not ironic that this country does not have a sovereign fund? Norway has one, as do many other countries around the world. We cannot afford one. It is a sad indictment of the Government and their economic policies over the past 10 years that the fiscal, trade and budgetary positions are at such low ebb just when the sub-prime credit crunch and the worldwide recession are starting to bite.
	My right hon. Friend the Member for Witney (Mr. Cameron), the leader of my party, was quite right when he said that this Budget is characterised, above all else, by the general perception of the markets out there that the Government have no room for manoeuvre because they did not put money aside when times were good. Unfortunately, it is our constituents who will suffer, and they will do so because there is not that room for manoeuvre, not least to implement those green policies, which the Government promised us on so many occasions.

Kelvin Hopkins: It is a great pleasure to follow so many good speeches. There are too many to mention, although I shall refer to one in particular: the superb contribution—someone else's description—from my hon. Friend the Member for Nottingham, South (Alan Simpson). His mastery of the world situation and of the energy world is unparalleled in the Chamber. I am sure that no one feels uncomfortable about my saying that.
	I was, 27 years ago, the joint author of a substantial booklet entitled "Energy—A Planned Policy" for the National and Local Government Officers Association. We wrote a lot about renewable energy, and one could read out chapters of that book now and they would sound current, because the things we are saying now we were saying then, all that time ago. We were beginning to become aware of the problems of carbon dioxide in the atmosphere, and we knew that we had to change the way we produced and used our energy. We said all sorts of things at that time.
	Depressingly, the money spent by the Government on renewable energy research was tiny at that time, and it was cut just after we published our pamphlet. All these years later, it is not so surprising that Germany has 360 times more installed solar capacity than we have—so much more capacity for a country that is not much bigger than ours—and 10 times more installed wind capacity. Those staggering figures showed that the Germans looked ahead, whereas we did not. We now realise that we are way behind and are trying to catch up.
	We are an island surrounded by waves, so we have the potential for tidal power on the Severn and elsewhere—indeed, possibly on the Thames. We have wind power and all sorts of possibilities. This country is not that sunny compared with Africa or even southern Europe, but we have sufficient sun for solar energy to make a major contribution. However, we have not done that and we are trying to catch up.
	I am pleased that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs has come back to the Chamber to listen to my speech, although he is perhaps here not specifically for that purpose and just happens to have returned while I am speaking. I hope that he will use his influence in the Cabinet to argue for much more radical renewable energy measures, to ensure that we start to make progress and try to catch up with Germany and the others who are so far ahead of us. We need to do so.
	I want to talk more broadly about the Budget. Like others, I think it is a "wait and see" Budget. I think that the Chancellor looked over a chasm and thought, "I am not going to do anything too radical today, because tomorrow there may be all sorts of problems, depending on what happens in the American economy in particular." So, he has made relatively marginal changes—some of them welcome, and I applaud him for that—but done nothing very radical.
	If, as seems likely, recession takes hold in America, spreads to the rest of the world and has some effect on us as well, the Chancellor may need to take more radical measures to deal with it, but if we have a recession of any kind, one should expect a spending deficit, because that is what happens in recessions. One does not want a tightening of fiscal policy at the beginning or in the middle of a recession. We should be relaxing fiscal policy, and we may need to do so.
	We are now realising that we must re-establish the importance of all the levers of macro-economic policy and put them in the hands of the Government. Interest rates—in theory at least—are with the Bank of England, but it is unthinkable that the Bank would look at just the inflation rate and decide interest rate policies on that basis. It must consider the performance of the economy as a whole. Unusually, I agree with the right hon. Member for Wokingham (Mr. Redwood), who said that the last thing one wants to do in a recession is raise interest rates to deal with inflation. Inflation will be ironed out by the recession.
	Much more dangerous than inflation at such times is deflation, as the Japanese found in the 1990s. Falling prices and people abstaining from spending because they anticipate price falls can create a vortex that causes terrible damage to an economy. That must be resisted at all times. Apparently, the Japanese have as a national characteristic a compulsion to save all the time. In recessions, we want people to spend, not save. The Japanese Government apparently gave tokens to poor people to get them to spend—they would not spend money—but they started to save the tokens, so there was a serious problem. Deflation is much more worrying than inflation and the Government should ensure that the Bank of England does not start tightening interest rates at this moment. In my view, interest rates should indeed be considerably more relaxed.
	One recent benefit that we have had is, at last, the beginnings of a fall in the exchange rate. I have argued for years that we should manage the exchange rate down to a much more competitive rate. Looking at the state of the balance of trade, it is clear that we have a structural problem, not a temporary problem. The exchange rate was too high and a permanent structural trade deficit was the result.
	The exchange rate falling is naturally good for us, but that ought to be a deliberate instrument of Government policy, not just something that happens. I hope that the Government will welcome that fall in the exchange rate and press the Bank of England not to raise interest rates. If anything, they should press the Bank to reduce them.

David Taylor: I am grateful to my hon. Friend for giving way to a former NALGO member. He talks about the need for a fall in the value of the pound, but in recent months it has fallen by about 15 per cent. against the euro. He suggests it should fall even further. Does not all that point up the correctness of the policy of the former Chancellor, who is now Prime Minister, to keep us out of the euro currency zone at any cost, by means of his five tests? Was he not right in that and proved correct in the face of all the new Labour opposition that he had to put up with?

Kelvin Hopkins: My hon. Friend, as he often does, anticipates one of the major aspects of my speech: to applaud the Prime Minister for keeping us out of the euro. It is unlikely that we will go into it now, but had we been stuck in the euro, we would not have depreciated and we would have been in much more serious economic trouble, so my hon. Friend is right.
	The third lever of economic power is fiscal policy. People seem to be exercised a great deal by not only the fiscal stance—the balance between expenditure and income—but whether we should run a debt. One certainly should not tighten fiscal policy during a recession or difficult times—during a downturn in demand—but there are ways in which one can maintain a reasonable balance if one is prepared to tax in the right way. Rich people tend to save most of their money by putting it in banks—

David Taylor: Offshore.

Kelvin Hopkins: Sometimes they put their money offshore. Those people have a low propensity to consume, as it is called in the jargon, so taking a little bit more money away from very rich people does not damage demand in the economy a great deal. If that money is handed to pensioners, poor people and families with children, who tend to spend every penny that they get to live on, that helps to sustain demand in the economy. That is a simple way of keeping the economy going while not having too big a spending deficit.
	We can deal with the situation, provided we are prepared to collect the money. My hon. Friend the Member for Leyton and Wanstead (Harry Cohen) cited an excellent book produced by the TUC, "The Missing Billions: The UK Tax Gap", which sets out the amounts that could be collected, but are not. It estimates Treasury losses due to tax avoidance at about £25 billion a year, £13 billion of which is from individuals and £12 billion from the largest corporations. This tax avoidance is not illegal, although, as Denis Healey said:
	"'The difference between tax avoidance and tax evasion is the thickness of a prison wall".
	I will not pursue that, but some tax avoidance comes pretty close to tax evasion. If the existing rules were strictly enforced and there were sufficient tax inspectors to collect all the tax, we would rake in many more billions.
	That is the situation without looking at indirect taxes. "Measuring Indirect Tax Losses—2007", a fine book produced in October by Her Majesty's Revenue and Customs, draws attention to the vast amounts of revenue lost, especially through VAT fraud. The VAT tax gap is about £13 billion. The book also examines tobacco and alcohol duties. Tobacco smuggling alone accounts for a loss of about £3.5 billion a year.
	Large sums could thus be collected without changing tax rates at all. I have done a quick calculation, and although it might involve some double-counting, it shows that £56 billion a year is lost. Let us talk about a third of that sum: £20 billion a year, which would be extremely useful. We could use it to help pensioners and children more. We could spend more on investing in energy conservation and alternative energy. We could even close the budget gap a little more and reduce Government debt. If we collected that money, we could choose to do those things.

Harry Cohen: I also have a NALGO connection. My hon. Friend and I—he, like me, is an old class warrior—would like to see resources going to the working class. Will he comment on the link between the ultra-rich and the middle class? Given that there are so many loopholes and tax fiddles, the ultra-rich are virtually paying less than the strata just below them: the middle classes. The middle classes are picking up the burden.

Kelvin Hopkins: I agree entirely with my hon. Friend. Many hon. Members will have read the "Green Budget" report by the Institute for Fiscal Studies, which points out that the bottom two deciles of the population have benefited slightly under our Government and the top two deciles have benefited fairly considerably. However, those in the middle have lost out, and one of the reasons is the gradual creeping down of the higher rate tax threshold. If that threshold had been raised—indexed, effectively—over time, many people who are paying 40 per cent. tax would not be doing so and would be better off. There are other factors that explain why those middle-of-the-road people—the very people whom all parties want to reward, because they tend to vote and to be the sort of people whom we want to persuade to vote for us—are not doing very well at the moment.

David Taylor: My hon. Friend talks about the very rich. Does he recall that the former right hon. Member for Hartlepool—now a European Commissioner—talked about new Labour being "intensely relaxed" about people becoming filthy rich? We heard an echo of that just a few days ago from the Secretary of State for Business, Enterprise and Regulatory Reform. Is my hon. Friend intensely relaxed about such comments from people at the top of our party?

Kelvin Hopkins: I am not at all relaxed about that. I have no envy in my nature at all, but I believe in justice. Social justice requires that the rich should pay a little bit more—a lot more, in fact—and that the poor should benefit from that extra taxation on the rich.
	I remind Conservative Members of the tax regime that operated when Mrs. Thatcher won power.

Henry Bellingham: Ninety-eight per cent.

Kelvin Hopkins: Under Denis Healey, the top marginal rate was 83 per cent. and there was a 15 per cent. surcharge for unearned income on top of that, so some people were paying 98 per cent. That was possibly a bit extreme— [ Interruption. ] They were difficult times. However, 40 per cent. is considerably lower than that. Nudging up the rate for the very rich would not be a bad thing.

David Taylor: Would my hon. Friend be surprised to learn that in the 11.5 years—those halcyon years, as Conservative Members often refer to them—when Mrs. Thatcher was Prime Minister, the proportion of gross domestic product taken by taxation was a full four points higher than it has been in the first 11 years of this Labour Administration, who, of course, have many years to run?

Kelvin Hopkins: I am surprised and disappointed. There is a lot of talk about child poverty. The proportion of children living in poverty in 1979 was considerably lower than it is now. We could deal with child poverty immediately, but it would take an act of great political will to redistribute income massively from the rich to the poor. However, that is not impossible. In Sweden, child poverty is a fraction of that in Britain. I ask the Ministers present, especially those from the Treasury, to think about that. I do not expect it to happen overnight. However, we should aim to achieve it quickly, hopefully before the next election, because I am sure that we would be rewarded electorally for such action.
	I want to say a little about the income tax regime. I was unhappy that we abolished the bottom 10 per cent. income tax band. Additionally, the threshold for the 40 per cent. band reaches down too low. I suggest that we put back the 10 per cent. rate, have a 20 per cent. band, and introduce a 30 per cent. rate for those on the lower part of the 40 per cent. band to reflect where the 40 per cent. band should really start. To compensate for that, we should have higher tax bands beyond that. My simple rule of thumb—I think that I suggested this last year—is that there should be a 50 per cent. rate for taxable incomes over about £60,000, and a 60 per cent. rate for those over £100,000. I do not think that anyone would find that unjust.
	I remember attending a meeting some 15 or 18 years ago with people from the City. They said that they had been watching the 1988 Budget, at which time Nigel Lawson was the Conservative Chancellor. As we all remember, Nigel Lawson reduced the top rate of tax from 60 per cent. to 40 per cent. Those people who worked in the City had looked aghast at the television screen and said "But we do not need the money!" That is the spirit that I want to see now. A small number of fading pop singers might emigrate because we had raised their taxes slightly, but I think the great majority of people would accept such a measure if they felt that it was fair and just and would help get rid of child poverty, raise pensioners' living standards and deal with energy problems. I believe that, ultimately, people are fair and just.
	My final point is about pensions. The Chancellor rightly raised the winter fuel allowance, but I do not think it has been raised enough, and I should like it to be paid differently. I think that it should be paid as part of the basic state pension, but that people should be given double payments before and after Christmas. It would be easy to administer, everyone would receive it, and it would be taxed. The rich would not receive a tax-free lump sum at Christmas, which is what happens at present. If the sum were built into the basic state pension and taxed, it could be recycled to make a larger winter fuel allowance for those at the bottom of the income scale who pay little or no tax. I believe that that would be a much fairer and more sensible system that would be welcomed all round.
	It would be possible to speak at greater length about all the matters that I have raised, but I think that I have had my time.

Charles Kennedy: We are all aware of the constraints within which the Chancellor operated this year. We are also aware of the sense of a gathering international storm which we hope will not engulf our own economy and others across Europe: the credit crunch and all the rest. But despite the massive considerations that clearly conditioned so much of what the Chancellor could do or was prevented from doing, when some of the headline announcements in the Budget are set not in the immediate context or the context that has developed internationally since last summer but in the context of the last decade, we see that very little in the Budget does any more to redress the growing sense of social imbalance that has been such a feature of this Labour decade.
	Until now, the economic situation both domestically and internationally has been benign. We should give credit where credit is due, although the Government ought perhaps to acknowledge responsibility where responsibility is due. A good deal of the domestic situation has to do with the stewardship of the former Chancellor, now the Prime Minister of the country. The sad fact is, however, that despite the undoubted greater wealth generated in the country, the social division between those at the bottom end of the income and opportunities spectrum and those at the top end has both widened and deepened, and the Budget has not redressed that. Because of the circumstances it was probably not possible for it to do so, but I think that in the context of fundamental social justice it is worth repeating that point.
	I want to discuss, specifically and briefly, three aspects of the Budget from the point of view of my constituency and my part of the country in the highlands of Scotland. They are the impact of fuel duties, the policy on post offices and the issue of housing debt. On fuel duties, I want to deal not with decisions and announcements in the Budget—that is a side argument for another day—but with the absence of something for which I and others have called for many years: a fairer approach to fuel duties, given that, as the Chancellor himself has acknowledged, they are being levied on this occasion with not just the environmental agenda but the revenue-taking agenda in mind.
	As I have said, the campaign in which I and others have been involved goes back many years. I first raised the issue in Brussels, along with my friend Jim Wallace, who was then Member of Parliament for Orkney and Shetland and who went on to become a Member of the Scottish Parliament and Deputy First Minister of Scotland. Jim and I worked closely on the issue in the 1980s and beyond, and spent a great deal of time exploring how other European Union member states were able to deliver derogations on fuel duties if their geography involved, for instance, islands or considerable areas of peripherality, if their Governments were enthusiastic about the idea, and if fuel costs had a disproportionate impact on fragile, socially remote areas.
	Throughout the subsequent years—indeed, decades— the Treasury in Britain has set its face against that like flint. Civil servants and Ministers do not like derogations: they do not like them in Whitehall, and if truth be told they are none too keen on them in Brussels either. But where there is a political will there is a way. We have seen the system delivered in other EU member states, although it has never been delivered here.
	Let us take one vulnerable example in my constituency, a very small, remote community on a peninsula on the west coast called Applecross. From time to time, Applecross has a petrol station. I use the words "from time to time" advisedly, because the petrol station tends to come and go depending on community initiatives of one kind or another, on the existence of a willing supplier, and on general concerns related to viability. Travelling from Applecross to the nearest permanent petrol station involves a round trip of 35 miles, and the price paid at the pump in Applecross compared with that paid in the metropolis called Inverness—let alone in the central belt of Scotland or the south-east of England—is gigantic in terms of mark-up. In a community where there is very little in the way of viable or regular public transport to meet people's needs, the motor vehicle is in no sense a luxury; it is an absolute necessity. Such communities would benefit from a derogation which the Treasury could pursue at Brussels level, and which would deliver a fairer distribution of the fuel tax take. It is very sad that the Chancellor did not visit that issue in the Budget.
	The hon. Member for North-West Norfolk (Mr. Bellingham) raised the subject of post offices in what I thought was a very good speech, particularly in relation to that issue. In the last week, we have seen the result of the "consultation"—I think that word should be in inverted commas—that the Post Office carried out in my part of the country on its proposed closure programme. The consultation received more than 1,000 responses, which is a lot in the context of the Scottish highlands. Of the 29 proposed closures, 28 will now take place; one post office has been reprieved.
	I cast no aspersions on that reprieved post office, which happens to be in the constituency of my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), but it does seem remarkable that a so-called genuine consultation exercise should result in only a single alteration to the original blueprint. To me that does not smack of genuine consultation. My other parliamentary neighbour, my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander), is to open an Adjournment debate on the issue in Westminster Hall at lunch-time tomorrow, and he will go into more details. I will say now, however, that the Budget contains nothing at all that shows, against that backdrop—particularly in fragile rural areas—a commitment to making the surviving post office network genuinely sustainable. That is the bigger long-term worry. This is not by any means the end of the story: it is the second round of Government closures. If the Government persist in office, I will not be surprised if they are back for a third and subsequent rounds of closures. That must give rise to great concern about the underpinning of the rural economy.

Geoffrey Cox: Has the right hon. Gentleman heard, as I have during the process of network change, as it is called, that some of the smaller, most fragile and vulnerable post offices, which one would think were the easiest candidates to pick off, are being left intact, and that some of the profitable ones are being closed? The suspicion is that the vulnerable and small ones are being left intact so that they can be picked off later.

Charles Kennedy: I thank the hon. and learned Gentleman for that helpful contribution. He makes a telling point, which many of us in our respective areas have heard expressed, not least by those who are most knowledgeable about the operation of the post office network and who know only too well how the management and leadership of the network tend to go about their business in getting the ducks lined up steadily over a number of years and proceeding with the original blueprint, albeit perhaps with a slightly extended time scale.
	To complement the point that the hon. and learned Gentleman has made, I would point out that, apart from the formal consultation that has taken place on the hit list, or the checklist, of likely casualties, other closures are already taking place, under the radar, under the guise of temporary closures. The sub-postmaster or postmistress, for whatever personal reasons it may be—retirement, or moving on to something else— gives up the tenancy and the professional contract to provide those Post Office services. That outlet then undergoes a period of temporary closure, but all too often that temporary closure slips into permanent closure. That does not appear necessarily on the radar as part of the formal consultation, but the impact in many of these communities is every bit as real because the net conclusion is identical. Therefore, not least in rural Britain, there is disappointment that the Budget is not taking more cognisance of the effects of other Government policies. Most of the measures in the Budget are certainly not seeking to ameliorate those effects.
	The third point concerns housing debt. Obviously, post-devolution, responsibility for housing policy generally in the Scottish context is transferred to Holyrood and to the Scottish Parliament, which is right and proper. However, I have been in correspondence with the Treasury because there is still a reserved aspect to that, and UK Treasury reserved powers are involved.
	I requested of the Chief Secretary to the Treasury earlier this year a meeting with colleagues from the Scottish highlands to press our particular concerns about what has happened there. They are particular to the Scottish highlands, but they are not unique in the UK by any means. Housing debt there, running at approximately £160 million, remains with the councils after tenants locally, in a highlands-wide referendum, rejected the stock transfer proposals. The difficulty is that councils in that position need to be given an option by the Treasury to help them to address the existing maintenance backlog as well as to expand affordable housing stock. At the moment, they are caught in the middle. They can do neither, because of the position they find themselves in. In an area such as our own, it is especially pressing owing to the enormous difficulties in meeting energy efficiency and fuel poverty standards—in many areas there is an absence of domestic gas supply—against a backdrop of soaring fuel bills. I hope that the Minister or the Whips who are listening will be able to encourage a positive response from the Treasury to our request. There is a genuine desire to have a serious and constructive discussion about that matter because it is a pressing one.
	Despite the constraints that I touched on at the outset of my speech, which are obvious and unavoidable at the moment, and therefore the somewhat non-event nature of quite a lot of this Budget, perhaps we shall look back in a year or two and say that the most significant aspect of the non-event Budget was that it flagged up the fact that the main event will be pushed back to 2010, rather than 2009, by which I mean a general election. However, within those constraints and against that backdrop, I think that on those three areas in particular—fuel duties, the future of post offices and the Post Office network, and housing debt—for large swathes of Britain and for my own part of the country in the highlands, there is much disappointment that there is nothing at all in the Budget to address them. For that reason, among others, I will oppose it in the Division Lobby tomorrow night.

Geoffrey Cox: I do not propose to take long.

Brooks Newmark: Please do.

Geoffrey Cox: I am very grateful. I thank my hon. Friend.
	The position that I have found myself adopting as I listened to the debate is one of considerable surprise, because there appears to be an emerging consensus. My hon. Friend the Member for East Surrey (Mr. Ainsworth) advanced the proposition that there was a lack of coherence and vision in the way the Government, and particularly the Chancellor, initiated their environmental measures. It was somewhat surprising that perhaps the majority of Labour Back Benchers agreed with my hon. Friend. In an excellent speech, the hon. Member for Nottingham, South (Alan Simpson) put his finger on the problem: what is lacking in the Budget is a sense of vision and a coherent understanding of the necessity not for a few piecemeal and fragmented measures but for a coherent policy.
	My right hon. Friend the Member for Wokingham (Mr. Redwood) said that Budgets should be about grand orientations. This Budget was not a grand orientation towards environmental policy as a driving factor in economic strategy. It was about a number of tax-raising measures that seemed to have the cloak and disguise of being green, but did not have a centre and a heart. The hon. Member for Nottingham, South put it well when he said that behind the Budget there did not seem to be any central vision.
	I have been asking myself as I have been listening to the debate why it is that the constituents whom I represent, in the largely rural areas for which I have the honour to be the Member of Parliament, should feel so cynical about the Budget that was introduced by the Chancellor last week. I think the answer is that, when they hear the Chancellor and the Secretary of State, they do not believe that the Government have a grasp of the integral elements that they will require to put through a genuinely environmental and green agenda.
	In my constituency, we are—to use the word "threatened" is perhaps to prejudge and prejudice the issue, but I will say it anyway—threatened by many applications for gigantic commercial wind turbines. The response, as the Secretary of State would expect in the area of west Devon that I represent, is almost universal hostility. These are not unreasonable people; if they were convinced of the urgent necessity, in the interests of our country and of the world, for renewable energy to have an adverse and unwelcome impact not only on the quality of their lives as they see it but on their businesses, their bed and breakfasts, their restaurants, their tourism industry, their tranquillity—because I have the honour to represent one of the last areas of rural tranquillity in England—

Martin Horwood: Do the hon. and learned Gentleman's constituents not recognise that their tranquillity, well-being and economic success are threatened by climate change in the long term, which is a far more serious threat than a wind turbine, and that wind energy is an essential part of tackling that problem?

Geoffrey Cox: If the hon. Gentleman will simply listen, he will hear what I am about to say—and I should add that several Liberal Democrat MPs support the resistance to the wind turbine developments.
	There is now a proliferation of applications for gigantic wind turbines in the rural area I represent, and they are being greeted with consternation and dismay by the inhabitants of the places to which they shall come. The thesis I offer to the Secretary of State is not about whether they are right or wrong; it is, rather, that if we are to convert people to a belief in the need for this type of renewable energy, we must harness their popular assent, but people will not believe in the need for such intrusive forms of technology unless they believe that the Government have a coherent underlying vision and unless the Government convince them of the urgent need for them. That has not been done in the run-up to the Budget.
	If there is a coherent vision uniting all the relevant aspects of government, why has a feed-in tariff not been adopted before now to encourage microgeneration? I am a member of the Environment, Food and Rural Affairs Committee. We looked into this last year, and we considered that it represented a powerful means of encouraging microgeneration, but why is it that only now do we have a commitment—even though it appears to be only lukewarm—to look into a feed-in tariff?
	The respective benefits of a feed-in tariff and the current low-carbon buildings programme simply do not match up; I think that the Secretary of State agrees with that. Frankly, the low-carbon buildings programme has been a failure. It has produced solar voltaic panels in 270 houses. In Germany, 130,000 households took up such panels in the last year alone. That situation is reflected across all the diverse range of renewable energies. The low-carbon buildings programme is bureaucratic, it has too many conditions and it is not worth it. I recently had solar thermal panels installed in my home. I looked into the low-carbon buildings programme, but it was too much hassle, there was too much bureaucracy, and there was too little money because the grants simply are not high enough. Therefore, I agree with the Secretary of State that the way forward is a feed-in tariff. If it is set correctly, it is likely that there will be an explosion of interest in microgeneration. There are hundreds of thousands of such households in Germany. It is becoming standard in some German states for there to be some form of renewable energy in a household, but not in this country.
	If my constituents see that there is a comprehensive and coherent Government policy that deals with all aspects of renewable energy and allows them not only to be taxed but to gain from renewable energy by a sensible feed-in policy, they will be much more likely to give their assent to intrusive technologies as part of an overall package of measures. However, they are likely to become cynical if they see only a Klondike-style gold rush of large-scale commercial wind companies coming to their villages and communities to erect 400-ft tall wind turbines and nothing else—no way they personally can become engaged in the battle to fight climate change, but simply the profits disappearing a long way from their communities. Similarly, when they see the Budget measures for green taxation, they are likely to become cynical because they do not sense that the Budget has introduced its environmental measures in the service of some coherent grasp of what is necessary. They sense only that it is another stealth tax-raising measure.

Martin Horwood: Will the hon. and learned Gentleman give way?

Geoffrey Cox: If the hon. Gentleman will forgive me, I shall not as I wish to make progress.
	There is a problem of credibility and belief. Only if people see an underlying profound sense of purpose in Government policy will they give their assent to the unpleasant bits. Only if they also see that the policy is not all unpleasant bits—not all stick, but that there is carrot, too, as part of a subtle, comprehensive policy of the type I describe—will they give their assent, and their enthusiasm, to it.
	I passionately believe that we need to harness the will and popular support of the people of this country. We cannot preach to them. We cannot simply expect them to accept having foisted on them unwelcome and intrusive technologies such as wind turbines that frequently damage the communities they are sited in—for instance, in terms of the effect on tourism and the perception at least of an effect on the quality of life of the communities. We cannot expect them to take those measures and to take the taxation as well.
	I remind the Secretary of State that across my constituency, which as he knows is extremely rural, there are many hundreds of farming communities and farming people have little option but to use a strong 4x4 vehicle to perform many of the intensive tasks that are required to be done on often remote land. Yet those who go to buy a new Land Rover after the relevant change comes into force—tomorrow or next month or whenever it will be—will find that they have to pay an extra £950 or £1,000, and they will feel that they are simply on the receiving end of repeated blows from the Government. The only way they would accept that is if they felt that behind it there was a coherent vision and purpose, and a sense that the Government were sincere in what they were doing in these Budget measures.
	However, people do not feel that. They might be wrong; it might very well be that the Secretary of State and the Chancellor are sincere in introducing these measures and really believe that they will have a benevolent effect on carbon emissions in this country. I accept that entirely, but we will not win the assent of the people of this country if we do not show them that we are bringing forward policies with a profound sense of purpose, such as that which the hon. Member for Nottingham, South so ably demonstrated in his speech.
	That is why I ask this question: if there is a coherent vision, why over the past decade or so since this Government came to power has a feed-in tariff not been examined and brought forward? If there is a coherent vision driving the Government's policy on the environment, why only now in the Energy Bill is the banding of the renewables obligation certificate being introduced? A criticism that has been made for many years is that because renewable energy technologies are in different states of evolution, and particularly because onshore wind is in an advanced state of evolution—it is ready now—the renewable energy obligation favours the established technologies. I welcome the proposals to band the renewables obligation, but why is it being done 11 years after this Government came to power? Why was it not done much earlier?
	If the country communities I represent had seen those kinds of measures brought forward some years ago, it might have been easier to win them over to the cause of renewable energy generally, and to get them to accept the intrusive and often unwelcome installation of gigantic wind turbines with which they are now threatened.
	It is a serious criticism of this Budget and of the Government's entire environmental policy that it seems to be fragmented and piecemeal and not to be driven from the heart by a profound underlying purpose that is able to win over and convince the people of this country. If it is not done in that way, there is a danger that people will be alienated from the cause of addressing climate change. The danger is that we will make them cynical and play into the hands of those who doubt even whether there is something that mankind can and must do. I firmly believe that there is something that mankind can and must do to resolve this important, nay, most pressing problem.
	I have the great honour of having James Lovelock, with whom I have had many conversations on these subjects, as both a neighbour and a constituent. He is a convincing exponent, as the Secretary of State will know, of the important and urgent need for action. I endorse and support what the hon. Member for Nottingham, South said. If this issue is indeed as serious as the Government say they believe it is, it will require an adjustment of our national policy in many fields, and food security is most certainly one of them.
	I should point out to the Secretary of State that the criticisms of the Budget are not intended as suggestions that there is not commitment to this cause on a personal level on the Government side. However, unless the Government can get their act together, bring the disparate elements of environmental policy together and go forward to convince people with the same passion and purpose as the hon. Member for Nottingham, South, this policy will fail to win the critical and crucial assent of the people of this country. Simply imposing taxation measures such as those in this Budget will do more than anything else to harm the cause of winning the battle of hearts and minds regarding climate change.

Martin Horwood: My main concern today is addressing environmental issues, but I shall begin by addressing another issue that is important to some of my constituents. Cheltenham is known to like a flutter or two, and Denman's breathtaking win in Friday's Gold cup certainly cost me a bit of pocket money, as I backed Kauto Star. If you will indulge me, Mr. Deputy Speaker, I will seize this opportunity to put on the record my congratulations to Edward Gillespie and everyone involved in the festival in Cheltenham for having put on such a wonderful show this week, despite extremely challenging circumstances at the beginning of it.
	The bookies certainly looked pleased at the end of their week, despite having lost a day of racing due to the high winds—but at least they are taxed only once. Bingo clubs, like clubs at The Brewery, in my constituency, pay both VAT at 17.5 per cent. and gross profits tax of 15 per cent. They feel that this is not a level playing field. Not only was this issue not tackled in the Budget; the Chancellor took the opportunity to increase amusement machine licence duty above the rate of inflation, thereby adding to the pressure on an industry that is already suffering.
	I am not arguing that bingo clubs are on a par with post offices in their value to the community, but they do seem to be closing at a similar rate. Having visited clubs in Cheltenham, I am satisfied that they perform an important social function, particularly for some of the less well-off communities and older members of society. I am also convinced that patrons generally bet only what they can afford. Therefore I hope that future Budgets will look more kindly on the bingo industry.
	We were promised a green Budget. That would have been timely, as the United Nations environment programme has just reported that the rate of glacier shrinkage appears to have doubled in less than a decade—a grim addition to the already worrying body of scientific evidence about climate change. Yet actually, the Chancellor was three quarters of the way through his speech before he even mentioned the environment or climate change. We then had the traditional series of re-announcements. Amazingly, there was the re-announcement of the Climate Change Bill, which I thought we all knew about, and there was more about the Bali conference and more about low-carbon buildings by 2016. At one stage, the Chancellor even seemed to be taking credit for the European emissions trading scheme.
	We had the usual complacent restatement of the Government's meeting their Kyoto targets. My hon. Friend the Member for Northavon (Steve Webb) has already pointed out quite how dangerously complacent that is, given that, according to the National Audit Office, simply using another accounting method that properly accounts for aviation and shipping shows that we have seen an increase in greenhouse gases under this Government. In fact, if we look at the figures since 2002, it does not matter which of the methodologies we use—the situation is getting worse. Of course, we all know that this great claim of the Government's to have met the Kyoto target is really only a result of the original dash for gas, which took us down below the Kyoto target many years ago.
	Then we had the announcement of the possible plastic bag tax, which I and many others have been calling for for what feels like years, but even that was not definite. We had the launch of an
	"ambitious household emissions reduction programme"—[ Official Report, 12 March 2008; Vol. 473, c. 296.],
	which I guess was an attempt to resurrect the shambles of the low-carbon building programme. On that, if not on much else, I agree with the hon. and learned Member for Torridge and West Devon (Mr. Cox), who criticised the way in which that scheme worked in practice.
	Then we had the non-announcement on vehicle excise duty, which will have no impact whatsoever until the financial year 2010-11. Among all this, strangely, there was no mention of the savage budget cuts to green projects such as the National Industrial Symbiosis Programme and the Waste and Resources Action Programme. Such cuts make it highly unlikely that business will be able to continue to improve its performance on waste reduction, in the way that it was able to do with the assistance of those two organisations.
	Of course, the Budget cuts across Departments—we cannot put the environmental bits in one box marked "DEFRA/Treasury". Other Departments are critically involved in terms of their impact on the environment. When challenged earlier, the Secretary of State dodged a question on carbon capture and storage by saying that it is a matter for the Minister for Energy. Well, it is relevant to an economic debate. As the Treasury document that accompanies the Budget, entitled "The UK economy: analysis of long-term performance and strategic challenges" makes clear, climate change, energy policy and the future performance of the UK economy are inextricably linked. That document states:
	"The Government will also seek to ensure that the UK makes the most of the potential economic benefits of the transition to a low carbon economy...It will...develop a low-carbon energy technology strategy to maximise the cost-effective potential for cutting emissions in the UK and internationally."
	However, nowhere in that document does it actually say how.
	During recent consideration in Committee of the Energy Bill, the Minister for Energy resisted a whole series of amendments that would have helped us move toward a low-carbon energy strategy. He even resisted enabling powers to introduce feed-in tariffs, which have already been mentioned today. He resisted amendments to lock carbon capture and storage into the development of a new generation of coal-fired power stations, led by Kingsnorth. He even resisted amendments that would have allowed him to broaden out the current competition launched by the Government for carbon capture and storage technology, which has been widely criticised as being too narrow and slow and has actually precipitated the truncation of an important carbon capture and storage project by BP at Peterhead. BP had already spent tens of millions of pounds of its own money on the project, which would have been on line ahead of the Government's competition project. All such amendments were rejected in Committee.
	The same Budget document to which I referred also extols the virtues of the shadow price of carbon—a measure that will be used to reflect the future cost of climate change in deciding on projects that are outside the carbon trading system. It states:
	"the Government will use the new Shadow Price of Carbon to ensure that the carbon impacts of policies—whether negative or positive—are taken into account systematically and consistently across Government".
	There is no dodging this—it was developed by DEFRA. However, this is the same shadow price of carbon that the Environmental Audit Committee recently concluded reflected serious flaws in DEFRA thinking. Our recent report on the 2007 pre-Budget report and comprehensive spending review concluded that
	"the Shadow Price of Carbon is set considerably lower than the level which Stern set for a 'business as usual' trajectory of emissions. In other words, by assuming that action will be taken to ensure that the effects of climate change will be relatively mild, the paper"—
	DEFRA's policy paper—
	"concludes that the costs of climate change are relatively low. In doing this, however, it is setting a relatively low carbon price...The risk is"—
	I hope that Ministers are following this argument—
	"that this will fail to discourage the approval of policies and projects that will lead to a growth in carbon emissions—and thus help to make it more difficult to achieve the stabilisation target that the paper assumes will be met."
	Friends of the Earth put it even more succinctly, saying that the Government
	"are using this lower figure, which has the effect of making carbon emissions go up, which means that they do not meet the targets that they are assuming are being met through the use of the shadow price...It is almost Orwellian".
	I would quibble only with the word "almost". This is surely the most perfect example ever seen of a self-defeating policy. Sure enough, it made all the difference in the decision to give the go-ahead to the third runway at Heathrow. Astonishingly, the Chancellor mentioned that decision approvingly in the same breath as stating that
	"aviation must meet its environmental costs".—[ Official Report, 12 March 2008; Vol. 297, c. 473.]
	In practice, DEFRA's optimism about the future ability of nations to tackle climate change and about meeting targets has been wrongly used to create a number that makes it more likely that we will miss those targets. You could not make it up.
	Just before the Chancellor mentioned climate change for the first time in his long statement, he made another statement with serious environmental consequences. On house prices, he said:
	"The best way to improve long-term affordability and stability is to build more houses".—[ Official Report, 12 March 2008; Vol. 473, c. 295.]
	Many hon. Members would agree, but the Select Committee on Communities and Local Government, the Campaign to Protect Rural England and others have repeatedly cast doubt on whether the Government's numbers really add up to housing affordability anyway. On purely environmental grounds, however, I should like to draw the attention of the House to the growth assumptions in the Budget:
	"UK GDP growth is forecast to slow from 3 per cent in 2007 to 1&frac34; to 2&frac14; per cent in 2008, before picking up to 2&frac14; to 2&frac34; per cent in 2009 and 2&frac12; to 3 per cent in 2010."
	Only the last of those numbers is at the level of growth that housing models are using to justify imposing huge numbers of extra houses on areas such as Gloucestershire; 56,000 extra houses are now slated for that county alone. The housing model numbers for Gloucestershire assume a growth rate of 2.8 to 3.2 per cent. sustained consistently for 20 years.
	The phrase "In your dreams" springs to mind, especially in the light of the developing global economic crisis. In fact, Northern Rock and the credit crunch have demonstrated the truth of what the Communities and Local Government Committee tried to tell the Treasury two years ago: many other factors in addition to the supply of land influence house prices, including the availability of credit, interest rates and so on. That is particularly true at national level, but there are myriad other factors locally. In my constituency of Cheltenham and the neighbouring borough of Tewkesbury, quite a large quantity of land has been released for housing over the past few decades, adding significantly to the total size of the town, yet we still experience relatively high house prices. That is the case because Cheltenham is still a wonderful place to live; it still has good schools and 98.5 per cent. employment, whereas other areas in the same travel-to-work area do not have such unaffordable housing. The housing market is very complex.
	I would be less worried if the Government were sticking to their promise to prioritise brownfield sites in this new housing development, but instead we have the acceleration and promotion of so-called growth points, which have been identified—this is certainly the case in Gloucestershire—in green-belt areas around already relatively affluent towns such as Cheltenham, despite the fact that other areas need and want such development more. The Budget did nothing to prioritise brownfield sites over greenfield where the new housing is needed.

Bob Russell: On the point about brownfield and greenfield land, does my hon. Friend agree that it would help if the taxation system were amended to establish a level playing field whereby VAT was levied on new dwellings and was brought down on conversions and modernisations? Does he also agree that the Government should be introducing policies whereby they look to bring back into use the thousands of empty houses?

Martin Horwood: My hon. Friend has got it exactly right. Clearly, the Government need to do more about empty homes, and he is right about using fiscal or other measures to prioritise brownfield sites over greenfield sites. The importance of the issue in the context of growth assumptions and the Budget's gloomy growth forecasts is that, if the growth points are established, they will become the only areas that are targeted by developers; if there is a general downturn, developers will end up going to those profitable greenfield sites first, under the growth point policy. We will see development on the green belt first, further damaging biodiversity and the natural environment, and yet again hindering the battle against climate change.
	Hon. Members need have no fear, however: help in the battle against climate change is at hand. On Friday,  The Guardian announced "Blair to lead campaign on climate change", stating:
	"Tony Blair is to lead a new international team to tackle the intractable problem of securing a global deal on climate change which would have the backing of China and America."
	Presumably, the former Prime Minister is going to do that using the same successful technique that he has used to bring peace to the middle east and unity to Europe—in which case, I think we should be very afraid.

Bill Wiggin: It is a pleasure to follow the hon. Member for Cheltenham (Martin Horwood), who was right to say that the dash for gas was the reason why the Government have hit their Kyoto targets. Apart from the two Front-Bench speeches, my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox) and the hon. Member for Nottingham, South (Alan Simpson) both made excellent speeches, and it was a pleasure to listen to them.
	One of the most important tests of whether a Government are acting in an environmentally friendly manner and taking climate change seriously is the way in which they are using their fiscal measures to encourage greener behaviour and developments. On that test, the Government have failed miserably. On transport, we heard in Question Time last week that the Prime Minister appeared keen to alter the carbon reduction target to 80 per cent. by 2050. A significant part of the problem that needs to be tackled is the emissions from transport. They account for about 29 per cent. of the United Kingdom's total carbon emissions.
	When it comes to promoting greener forms of transportation, however, the Government are strangling development rather than promoting it. Much play has been made of the so-called showroom tax—a one-year only discourager that would, as it happens, target my constituents who need four-wheel-drive vehicles, as well as large-engined sports cars as are favoured by footballers and such—and the apparent first-year exemption for vehicle excise duty for cars emitting less than 130 g per kilometre, which is the EU standard. Just as the 2p income tax reduction was exposed last year as a tax con because of the removal of the 10p tax rate, those changes will hit families hard and result in a stealthy tax gain for the Government.
	Pretending to be green and using the so-called green taxes to try to fill the massive Government debt black hole will ultimately be damaging to the economy and the environment. Moreover, when it comes to promoting existing greener fuels, the Government are penalising those who are doing the right thing and making the choices that promote sustainable transport use.
	In fact, my complaint against Labour's Mayor and his new congestion charge is that it removes the incentive for alternative-fuel vehicles. That is a great loss, especially for families who need to be able to use cars but cannot bear to use traditional fuel because of its carbon pollution: they now have no choice at all. I am grateful to the Secretary of State for his offer, but sadly there are no family cars emitting less than 120 g per kilometre.
	I recently had the privilege of test driving the Vectrix electric scooter, or motorbike. It does not require petrol. It just needs to be topped up with electricity from a socket, although few public electric recharging points are available nationwide. Despite the cleaner technology, the Budget contained no commitments that would encourage the growth of this sector, drive demand and help to make this type of product more affordable. The scooter currently costs just under £6,000, which is about three times more than a similarly performing petrol equivalent, and not much less than a Harley Davidson. We need to do more to encourage that type of technology.
	I declare an interest as an owner of a vehicle powered by liquefied petroleum gas. The fuel duty on that greener, cleaner and more efficient fuel has spiralled in recent years, and the proposed increase in the Budget—to come into effect from October—will give little comfort to owners of LPG vehicles or the industry. In 2005, the duty on LPG stood at 9p per kilogramme. The 2006 Budget increased that by 3.21p, or 36 per cent., to 12.21p. Last year's Budget increased that by another 4.28p to 16.49p—a rise of 35 per cent. And this year's Budget points to a further increase of 4.28p, which is a rise of 26 per cent. That means that owners of LPG vehicles will, from October, have to pay 20.77p per kilogramme, which is 11.77p more than just three years ago, or an increase of 130 per cent. Similarly, the duty paid on compressed natural gas will soar by 52 per cent. as a result of this Budget, from 9p per kilogramme in 2005 to 13.7p.
	Those duty increases are significantly higher in amount and proportion than the 2p increase on petrol, diesel, and bioethanol. There are more than 115,000 owners of LPG vehicles in the UK and the Government will penalise them by more than doubling the amount of fuel duty that they have to pay. That is not a particularly sustainable approach to take.
	The Government's policy appears to be to increase taxes on an area of green growth, instead of encouraging and promoting its expansion. That would also appear to go against the spirit and recommendations of the King review of low carbon cars, which was published on the same day as the Budget. Professor King highlighted four key challenges for reducing carbon dioxide from road transport. These included reducing CO2 through fuel efficiency and enabling an expansion of low carbon fuels. LPG and compressed natural gas fulfil those functions. The King review comments that there should be an:
	"increased use of alternative fossil fuels such as LPG and CNG which can both offer small but significant life-cycle CO2 savings over petrol and diesel. Cars capable of using LPG or CNG currently represent less than 1 per cent of the total car stock but there is scope to expand their use."
	The Chancellor in his speech on Wednesday said:
	"Professor King found that simply by switching to the cleanest cars on offer, motorists could save 25 per cent. of their fuel costs"—[ Official Report, 12 March 2008; Vol. 473, c. 297.]
	but by trying to cash in on the growth in LPG and CNG use, that 25 per cent. saving may not be as great, and the Government run the risk of failing to promote the cleaner fuels that more people need to use to achieve significant reductions in the carbon footprint of transport. The Government have their hands around the necks of LPG and CNG users, and are getting ready to throttle them. This was not a green Budget, but a green stealth tax Budget.
	Turning to the issue of biofuel and its environmental potential, the Budget has again failed to address the inherent weaknesses in Government policy towards this fuel. In spite of widespread criticism, the Government are pursuing the renewable transport fuel obligation to increase biofuel use, but, because the sustainability criteria have not been produced—if indeed they are developed at all—the relentless growth in biofuels may continue in an irresponsible way. We have seen the push for biofuels, particularly in the USA, leading to significant increases in food prices. In the last year alone, the price of corn has risen by 31 per cent., of soya by 87 per cent. and of wheat by 130 per cent. That has a knock-on effect right the way down the food chain. The consumer is hit with higher prices, and the rise in prices is also forcing domestic farmers into financial difficulties. Pig farmers are being especially squeezed, with the cost of feed doubling in the last year alone. If the industry does collapse, cheaper imports of animals reared—this is very important—to lower welfare standards will flood the domestic market adding to shoppers' carbon footprints.
	The problems associated with the unsustainable growth of biofuel extend beyond food prices in the farming sector. The demand for palm oil for use in biofuels as well as in food and cosmetics is leading to the destruction of the rainforests of Borneo and Sumatra. As much as 10 million hectares of habitat could be lost, and that is having a devastating impact on orang-utan populations, which might be as low as 7,000 in Sumatra. They could face extinction within five years.
	I must take this opportunity to pay tribute to the roundtable on sustainable palm oil, which is a fantastic initiative designed to ensure that the palm oil that we buy is from sustainable sources that also live up to the standards on issues such as human rights and exploitation that we would expect from our major retailers.
	However, despite my warm words, things need to move faster. I am warned that it might be only five years before we lose our sustainable population of orang-utans in the wild. It may take that much time to get sustainable palm oil on to our shop shelves. I fear that if palm oil comes into our fuel tanks without awareness among the general public, an explosion in the demand for that palm oil would quickly lead to the loss of those great apes. Sime Darby, a major palm oil producer that seeks to ensure that it can deliver sustainable palm oil, has invited me to visit Malaysia and Borneo to see what is being done to preserve the habitats of those great apes. I also congratulate those firms that have already changed their buying policies to include palm oil from sustainable sources.
	We hear many pronouncements about globalisation and the Budget in terms of the financial markets and economic impacts, but the Budget also has an important role to play in contributing to the sustainability of world resources, rather than their over-exploitation. I note the review into the wider environmental and economic impacts that has been announced, but that piece of work should have commenced earlier. Moreover, it remains unclear whether sustainability standards and targets will be in place or when they will become applicable.
	Back in October, during the debate in Committee on the Renewable Transport Fuel Obligations Order 2007, the Under-Secretary of State for Transport, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick), stated that the date for sustainability targets was 2011 and that that was just an aspiration. The Budget has thus far failed to elucidate any further on that quasi-commitment. We need to be clear that biofuels can be a positive step forward in the fight against climate change if they are sourced in a responsible and sustainable manner.
	It is not just in the area of fuel duty and biofuels where a more sensitive and targeted approach could have been beneficial to the environment and consumers. As chairman of the all-party cider group, and someone who represents a constituency in England's cider-producing heartland, I have followed with interest and sadness the rise in duty on cider. It is disappointing to see that the Government have decided to clobber all cider drinkers and producers when they could have taken a more targeted approach.
	I am sure that all right hon. and hon. Members are familiar with the problems of binge drinking. We all see the disruption and antisocial behaviour that a minority of reckless and irresponsible drinkers cause in our town centres. However, instead of using the Budget to take action against the minority who cause the problems and raising duties on the higher strength alcoholic products, which are among the cheapest and most affordable, the Government are hitting everyone. The Opposition have put forward proposals on alcohol taxes that would take effective action against the irresponsible minority and make higher strength ciders and other similar alcoholic drinks more costly to buy, but would not impact on the majority of the country's 37 million responsible drinkers who consume medium and low-strength alcoholic beverages.
	The Government might not have realised it, but their approach to alcohol taxation, which is to penalise all types of cider and mass-scale cider producers, such as Bulmers and Westons in my constituency, has a negative impact on the environment. Cider is a domestic success story with more than 1 billion pints now sold each year. That success through rising demand has lead to widespread investment in sustainable environmental practices. Cider producers take great pride in ensuring that their chemical, water and energy uses are kept to a minimum.
	In Herefordshire, Bulmers is a lead partner in delivering the county's biodiversity action plan. Two million cider apple trees have been planted in more than 5,000 acres of land in recent years. Green, environmental and sustainable practices are awarded through industry-led initiatives such as the golden apple awards. Instead of using the Budget to support medium and lower-strength ciders, and recognising the benefit that cider producers bring to our environment, the Government are treating a British success story like a piggy-bank that they intend to raid.

Nigel Evans: My hon. Friend is defending the cider industry, a great British industry that is based in his constituency, but will he defend another great British industry, the British pub, which sells that product? As a result of the blunderbuss approach that has been taken to taxation, all alcohol has been hit, as my hon. Friend says. Pubs are closing at a rate of four a day, and the changes announced in the Budget will be the death knell for yet more of them.

Bill Wiggin: I absolutely agree, and I know that my hon. Friend has worked extremely hard with the pub trade to ensure that people in the House understand the problems that publicans and brewers face. It is fair to say that almost everything that I have said about cider applies to beer. A huge amount of hops are grown in my constituency and contribute to the beer industry. What he says about the lack of targeting absolutely chimes with the message of my speech. The Government had a unique opportunity to tackle the antisocial behaviour agenda, which I know they care about, but they missed a trick, which is a great shame.
	At a time when fuel and food imports are rising and the cost of living is increasing, when British taxpayers and families are facing record burdens of taxation, and when the Chancellor of the Exchequer is more concerned with protecting the Prime Minister's disastrous handling of the nation's finances than improving the national economic outlook, we, as a country and as individuals, may not be best placed to put this country in the leading position that it needs to be in to tackle climate change and promote the environment.

Justine Greening: It is a pleasure to wind up the debate on behalf of the Opposition, particularly on a topic as important as this year's Budget and the environment. This has certainly been an interesting debate about a Budget that probably shows the Government at their worst—ham-fisted, misguided and deeply cynical—and that damages the electorate's trust in them.
	We have heard many interesting contributions, and I shall come to them shortly, but first it is worth reflecting on what we heard about the Budget from the Secretary of State. The reality is that whatever his warm words, and however good his intentions, the Government have put forward a Budget that was more about eco-spin and raising revenues than doing anything meaningful to protect the environment. The Secretary of State may think that I am being uncharitable, but my concerns are mirrored by many outside the House.
	In fact, it seems that virtually nobody was happy with this year's Budget. Both the business community and environmental lobby groups saw it as deeply inadequate. Chris Sanger of the accounting company Ernst & Young described it as
	"a hotchpotch of measures which is indicative of a Budget without a key theme."
	Tony Juniper of Friends of the Earth said:
	"The chancellor promised to put sustainability at the heart of today's announcement, but he has merely tinkered in the margins."
	John Sauven of Greenpeace talked about the Chancellor
	"dropping the ball on climate change"
	and went on to say:
	"his measures have failed to match the scale of the challenge we face."
	The Institute of Chartered Accountants said that the Budget
	"does nothing to address the failing competitiveness of the UK nor to restore confidence overseas in the UK as a place to invest and do business."
	Those are damning assessments—and unfortunately for the British public, they are right.
	Make no mistake: the two major planks of the Government's Budget—hiking up taxes on motorists and raising alcohol duties—are nothing more than stealth taxes. This year's Budget is what I would call eco-spin of the most cynical kind. Environmental taxes generated £35 billion for the Government in 2006. That might sound like a lot of money, but despite all that tax, the Office for National Statistics tells us that environmental tax receipts as a percentage of gross domestic product have actually fallen from 3.6 per cent. in 1999 to just 2.7 per cent. in 2006. Moreover, environmental taxes as a percentage of total taxes and social contributions have decreased from 9.7 per cent. in 1999 to just 7.3 per cent. in 2006. We are going in the wrong direction. That is because green tax rises have been dwarfed by the Government's wider stealth-tax agenda over the past 10 years.

Steve Webb: I very much share the hon. Lady's analysis that green taxes should form a substantially higher share of total taxes. She suggests a big increase in that share. Can she identify some of the green taxes that she would like to increase so that other taxes could be cut?

Justine Greening: We have talked about a whole range of green taxes that we would like to see. We set out the increase in the banding on vehicle excise duty and we talked about the feed-in tariff; we raised the issue of the carbon levy and changing from the climate change levy. We have set out a whole range of policies. Moreover, we have talked about how we would handle them. Unlike the Government, we see green taxes not as stealth taxes but as replacement taxes. When we increase green taxes in one area, we will reduce other taxes in another. The fact that the Government have not handled the issue in that way is one of the main reasons why people have so little trust in Labour's green tax agenda.
	Putting aside for a moment the issue of green tax revenues, we have to ask whether the agenda has had a positive impact. Many of the figures suggest that it has not. Since 1997, UK carbon dioxide emissions have risen. If we are to meet the UK's 2010 target, we will have to reduce CO2 emissions by about 87 million tonnes. Such figures show the utter failure of the Government's green agenda.
	Many speakers tonight have talked about the Government's lack of vision, and I totally agree.  [I nterruption. ] Government Ministers sat on the Front Bench are shaking their heads—saying, I presume, that the taxes that I have mentioned are not stealth taxes. I hope that when she gets to her feet, the Exchequer Secretary can talk about the changes in behaviour that she is expecting as a result of the vehicle excise duty tax changes, for example. Is she prepared to publish the Treasury's assessment of how many cars there will be in each of the vehicle excise duty bands over the next three years—the assessment that led to the Government's calculation in the Red Book on the vehicle excise duty tax take?
	Will the Exchequer Secretary publish the Treasury's assessment of the number of new cars that will sell in the bands that have the first-year charge? For example, how many does she expect to be in the top band, M? If the Government will not publish those figures, we will be left with the conclusion that the figures are not there and that the calculations were about increasing tax more than anything else. I give the Exchequer Secretary's officials, who have been sitting there diligently, the chance to prepare those details; I hope that I shall be pleasantly surprised in a few minutes.
	I come to the contributions made in this debate, which was wide-ranging. I particularly enjoyed the speech made by the hon. Member for Nottingham, South (Alan Simpson), who had lots of interesting ideas and showed some sort of vision of how he would like the green tax agenda to be carried forward. He raised not only the issue of climate change, but the peak oil challenge, the current stock market and the credit crunch. He underlined the need for successful action in the coming years.
	The hon. Member for Northavon (Steve Webb) talked about the lack of joined-up government, about which a number of us have been extremely worried. However committed the Ministers at the Department for Environment, Food and Rural Affairs are, what they are trying to achieve is being fundamentally undermined by their colleagues in other Departments—especially the Treasury and the Department for Transport, which seems to be producing many plans that will have a serious CO2 emissions impact. It is failing to set out the ultimate climate change impact of its plans when it presents them to the public.
	I move on to the contribution made by the hon. Member for Leyton and Wanstead (Harry Cohen); I have happy memories of serving with him on the Work and Pensions Committee. His was a robust and—I will not dress it up—characteristically anti-capitalist speech. He wants us to clamp down on capitalism, non-doms and all sorts of things. I do not agree. His arguments are slightly yesteryear for me, although I appreciate that they are still important to him.
	We then moved on to an absolutely fantastic contribution by my right hon. Friend the Member for Wokingham (Mr. Redwood), who pulled together the strands of the various challenges that we face, not only with the climate change agenda but particularly acutely with the problems in the world stock markets. I thoroughly agreed with him when he described the Chancellor as complacent. The issues that we face in the world financial markets are certainly not ones to be complacent about. He contrasted very well the US Government's speed and effectiveness in handling the issues of Bear Stearns in recent days with our own Government's handling of the terrible problems at Northern Rock, which still continue to play out.
	The right hon. Member for Leicester, East (Keith Vaz) spoke about alcohol taxation. I look forward to his Select Committee's report on binge drinking. What is needed is an informed debate, and when that takes place we will see that imposing swingeing tax rises across the whole alcohol budget is probably not the right way to go about tackling binge drinking and that we should have targeted measures instead.
	My hon. Friend the Member for North-West Norfolk (Mr. Bellingham) gave us a completely different slant on today's debate when he talked passionately about the issues faced in the rural area that he represents. He covered the problems of small businesses, for whom there certainly was not much in the Budget. He discussed the closure of post offices, which are themselves small businesses, and the plight that they are facing. He spoke about pubs—another form of small business that was just mentioned by my hon. Friend the Member for Ribble Valley (Mr. Evans). He clearly set out the challenges that many of our pensioners face—not only in meeting rising fuel bills but, given their inability to switch to lower-emitting vehicles overnight, as a result of the Government's measures on vehicle excise duty.
	The hon. Member for Luton, North (Kelvin Hopkins) made an interesting speech about the issues that he picked up on some time ago when he worked with the union, NALGO. He said that he would have liked to see a relaxing of fiscal policy at this point in the economic cycle. It is concerning that we are not in a position to do that because of the way in which the Government squandered so much of the economic growth that we have had over the past 15 years. I hope that that does not mean that we are constrained in how we handle the difficult times that may be ahead.
	The right hon. Member for Ross, Skye and Lochaber (Mr. Kennedy), who is not in his seat—I am not sure where he will be at this point in the evening—mentioned a lovely-sounding place called Applecross and the problems with petrol prices and the 2p increase in fuel duty. He also talked about post office closures.
	My hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox) made a powerful contribution in which he spoke about the lack of vision to which many Members are still referring and the fact that there is no overall coherent logic to what the Government propose in their Budget. He recognised the need to pull together climate change and a whole range of other areas—not only green taxation but renewable energy and even food security.
	The hon. Member for Cheltenham (Martin Horwood) initially talked about matters that had nothing to do with climate change, including bingo and double taxation, but went on to discuss his concerns about the low-carbon energy strategy and the shadow price of carbon. There are some serious debates to be had about the shadow price of carbon, which is a vital piece of any calculation for understanding the impact of carbon emissions on the environment and, specifically, alternative policy options. If that carbon price is not set correctly, not just today but as it changes over the longer term, we will get bad decision making by Government.
	My hon. Friend the Member for Leominster (Bill Wiggin) made an impassioned speech in favour of low-carbon transport, which I thoroughly agree with. He mentioned the electric bikes that he has ridden. One of that company's competitors turned up in my surgery a couple of Saturdays ago. All the companies involved are keen for that market to expand and be opened up so that people are able to do the right thing and start to use bikes and motorbikes that emit less than the ones that they have to use today. Finally, he talked about something close to his heart: cider. It is important to him and many hon. Members, and he was quite right to say that the Government's approach to alcohol taxation was a blunderbuss approach.
	Moving away from Members' contributions to return to the Budget itself, there is no doubt that transport played a large part in it. Emissions from transport have risen by just under 6 million tonnes of carbon between 1997 and 2005, and 21 per cent. of the UK's total CO2 emissions now come from transport. We all know that there are those who are wedded to their cars, and however hard we try, we just cannot get them to take any other form of transport, even for the shortest journey.
	I understand from the paper that the Secretary of State for Children, Schools and Families recently chose to have his chauffeur drive him 450 yd to a Labour fundraising event and back again. Perhaps the key to success in good environmental tax policy might be for the Exchequer Secretary to have a chat with her friend the Secretary of State and see what policies could be introduced to get him out of his car. It is lucky for us that most other people in this country do not follow his example—who knows what CO2 emissions would be if they did?
	There is no doubt that this Budget hits car owners in particular, and although the vehicle excise duty was meant to be a green tax to support those who had done the right thing, it does not do so. Perhaps more than 80 per cent. of car owners will pay more as a result of the changes to taxes on motorists. Many will be penalised for doing nothing more than owning a car in which to drive their family around. Those are the same families who face rising mortgages, energy bills and food bills. At the very time that they are experiencing more pressures on their disposable income—what is left at the end of the month—the Chancellor comes along, kicks them when they are down and says, "Thanks very much. I'll have even more tax off you from your disposable income to pay for your car." Although the cost of living is going up, Labour is making it worse for those families. Families with a Ford Galaxy or Volvo V50, or those in an entirely different situation, such as black cab drivers, will face a £100-a-year increase in vehicle excise duty.
	As was said, although there are tax cuts for cleaner cars, they total £15 million. That pales into insignificance when compared with the tax rise for polluting cars, which the Red Book shows comes to a massive £750 million. Again, I ask the Exchequer Secretary if she could provide more details of the behaviour that the tax change is meant to drive. Otherwise, many of us in this House and the public outside will have no alternative other than to conclude that it is a stealth tax, designed to get the Government out of their public finance hole. It is not just we who are concerned. Edmund King, president of the Automobile Association, has warned that the new bands could be a green smokescreen. Sheila Rainger of the Royal Automobile Club stated that many ordinary families will end up paying hundreds of pounds more.

Nigel Evans: Does my hon. Friend accept that cars and 4x4s in rural areas are not a luxury, but working farming vehicles? They are a necessity where rural transport is rather inadequate.

Justine Greening: My hon. Friend raises a good point. Not everyone is able to change to a lower-carbon car. Even if they pick a car that is best in class, it may still be found higher up the band because it is a particular sort of model.
	I was about to move on to plastic bags. We saw yet another build-up—it was in the papers that we were going to have a plastic bag tax. What happens when we get to Budget day? We "may" have a plastic bag policy or tax. The irony is that it is very much, "Do as I say, not as I do" from the Government. It turns out that last year, the Government bought 1.2 million plastic bags to help raise the profile of various Whitehall bodies at a cost of about £90,000. I wonder whether any of them had the words, "Act on CO2" printed on them. Perhaps we will never know.
	I cannot end my speech without mentioning zero-carbon buildings. That initiative was much vaunted, and the way in which it would kick-start the market was trumpeted. The Government's aspiration—I assume I can call it that because they may no longer be able to describe it as a full pledge—is for all new domestic homes to be zero-carbon by 2016, which is only eight years away.
	The Budget's move to extend the stamp duty relief on zero-carbon homes to zero-carbon flats comes only six months after the original regulations, which specifically excluded flats and maisonettes, passed through Parliament. When the Government introduced those regulations, Ministers told me that the relief would kick-start the market. My hon. Friend the Member for East Surrey (Mr. Ainsworth) told us that, at the end of 2007, six homes had qualified. I can update the figure, which has risen. I am sure that he will be pleased to hear that, at the end of February, nine homes had qualified.  [Interruption.] Labour Members say that that is a 30 per cent. increase, but the bad news is that the rate is reducing. Before the final quarter of last year, the Government were getting two a month, but now the figure is just under two—I admit that February was a short month.
	I can only imagine the party in the Treasury when the tenth zero-carbon home qualifies for stamp duty relief. Doubtless, there will be a cake with 10 little candles and officials will run in and say, "Minister, Minister, Minister, at last we're into double figures, so only 99.9999999"—hon. Members get the picture—"per cent. of the new build market to go."
	Page 105 of the Red Book deals with the reasons for the current position. It refers to the Government having a plan to finish defining a zero-carbon home by the end of the year. It is amazing that any homes managed to qualify, given that the definition has not been established. Perhaps we should congratulate the Government on getting as many as nine homes through when they have not managed to work out what constitutes a zero-carbon home. Nevertheless, we will see how they get on.
	The Government are not content with new domestic build—the policy is being extended to Government buildings, public buildings and, by 2019, all non-domestic buildings. I am sure that the building industry will be keen to find out what zero-carbon means by the end of the year when the Government have finally managed to devise a definition.
	Whereas the Government perceive green taxes as stealth taxes, the Conservative approach is more balanced. We perceive green taxes as replacement taxes. When there are tax rises in one sphere, we need to ensure that they are offset by tax reductions elsewhere. The Government do not understand that concept. For the Prime Minister and the Chancellor, green tax is not about changing behaviour; it is simply another way to raise money.
	Friends of the Earth director, Tony Juniper, said:
	"We urgently need real political leadership on this issue",
	but it is clear that we have none. The threat to the environment exists now. We need firm action, decisive policies and innovative thinking to make a difference now. In the Budget, the Chancellor gave us nothing but half measures, token gestures and a total lack of vision and direction. Is that what he means by stability? He should have called it inaction. The Secretary of State for Environment, Food and Rural Affairs told us that the Budget demonstrates how seriously the Government take the environment. Quite. They do not take it seriously at all.

Angela Eagle: The debate has been interesting. Last week's Budget was delivered against the background of the most uncertain period in the global economy for some time. The problems in the world's credit markets, which first manifested themselves in the American sub-prime mortgage market, have continued to reverberate around the world, not least over the weekend. That is the sombre background to our debates.
	As we contemplate the events in the credit markets, however, it is crucial that we keep a sense of perspective. Clearly, we must tackle the current position, but we must also prepare our economy for the medium and long-term challenges that we will also face. Far from failing to fix the roof while the sun was shining, as the right hon. Member for Witney (Mr. Cameron) has repeatedly claimed, we have attended to the necessary roof repairs. We have also renewed the rotten foundations that we found when we took over responsibility for the lease and have completely modernised the inside of the house. After the years of neglect and decline that went before, the Government have ensured that we can all inhabit a more secure and dependable family home. There is clear evidence of the progress that this Labour Government have been able to make in the 10 years during which we have been responsible for the lease of the building.
	In 1997, Britain was the least stable economy in the G7. After 10 years of Labour stewardship, we are now the most stable economy. If we compare the record of our first 10 years of economic stewardship with the last 10 years of the Conservative Government, we begin to see why. Labour has achieved inflation rates that are on average half what they were when the Opposition were in government. Interest rates have been half what they were under the Tories, too, yet growth has been double what they managed to achieve. Employment rates are now at record highs, with the creation of 3 million extra jobs, and there are nearly 2 million extra homeowners. Household net income has increased by 25 per cent. since 1997 and net wealth has increased by 72 per cent.

Henry Bellingham: What about the trade deficit, which I gather is the worst since records began? Am I right in saying that Britain has fallen in the World Economic Forum competitiveness rankings, from fourth in 1998 to 11th today?

Angela Eagle: We had the highest rate of growth in the G7 last year, at 3 per cent. The hon. Gentleman fails to talk about the figures that demonstrate the strength of our economy and he makes a partial case. The UK has been the fastest or the second fastest growing economy in the G7 for six of the past seven years and has achieved the fastest growth in income per head among all G7 countries in the past 10 years.
	That record of success and stability means that, despite the global economic turbulence that we now face, the forecast evidence points to a slowdown, but not the end of growth in the UK economy. Our economy is strong, stable and resilient. In the testing conditions that we now face, that flexibility will stand us in good stead. Therefore, in last week's Budget, my right hon. Friend the Chancellor had to consider what action he needed to take in the short term to assist with the challenges that we face due to global conditions. He also had to look through the short-term turbulence and uncertainty to prepare our country for the challenges that undoubtedly lie ahead. It is that longer-term challenge to which I want to turn.

Justine Greening: At Treasury questions the week before last, I asked whether the sustainable investment rule would be breached or whether the Government could guarantee that it would not be. Can the Exchequer Secretary give the House a guarantee that the sustainable investment rule will not be breached over the next three years?

Angela Eagle: The Budget forecasts deal with that issue. I refer the hon. Lady to the appropriate pages of the Red Book. The point of the sustainable investment rule is to decouple much-needed investment in infrastructure from the ups and downs of the economic cycle.

Geoffrey Cox: Will the Exchequer Secretary give way on that point?

Angela Eagle: No, let me finish.
	When we came into government, we inherited a wrecked public infrastructure, in which there had at points been lows of 0.6 per cent. of GDP of investment. We have since had 10 years of stable public investment and have got that figure up to 2 per cent. That is why, when I walk past schools and hospitals in my constituency, they are no longer falling down; they are in new buildings of which we can all be proud. It is because of the sustainable investment rule, which was created to ensure that we can invest in our public infrastructure as we need to, that we have enjoyed the success that I am talking about.

Bob Russell: Has the Minister noticed, while on her walkabouts, that the gap between the rich and the poor has widened under 10 years of new Labour, that child poverty has increased, and that social housing is the worst it has been in about 20 years?

Angela Eagle: I notice with great pride that this Government have ended the connection between age and poverty for the first time ever. There is now no longer a correlation between a person's age and the likelihood of their living in poverty. We have taken 2 million pensioners out of poverty, and 600,000 children out of relative poverty. This Budget will take us further forward.
	In the Budget, my right hon. Friend the Chancellor had to consider what action to take in the short term to assist with the challenges that we are facing due to global conditions. He also needed to look ahead. Perhaps the most serious and demanding issue facing us is the question of how to tackle catastrophic climate change. We are in the forefront of the efforts to meet what Lord Stern has referred to as the "greatest market failure" the world has ever seen. Internationally, we are leading action aiming for a post-Kyoto agreement next year in Copenhagen.
	Domestically, too, we are creating a robust new framework to meet the challenge. The Climate Change Bill will make us the first country in the world to legislate for carbon budgets, and my right hon. Friend the Chancellor announced last week that the first carbon budgets would be delivered alongside next year's Budget. The Energy Bill and the Planning Bill will enable us to begin the work of decarbonising our own economy and ensuring that we are able to meet the extremely challenging targets for renewable energy generation that we have been set by the European Union.
	We also have to price carbon and create scarcity by capping emissions so that we can trade them. This will allow market mechanisms to help us to drive the innovation and technical development that we need to continue economic development for all the people in the world, without destroying the eco-systems on which all life on earth depends. The European Union emissions trading system is the most advanced in the world, and London is at the centre of the rapidly expanding carbon market. The Budget maintains our engagement and ensures that, via the clean development mechanism, developing countries can rely on the cleanest technology while harmful emissions are minimised.
	At home, fuel duty will increase, albeit later than originally planned, in recognition of the short-term economic conditions in the oil market. The restructuring of vehicle excise duty will incentivise motorists to buy more fuel-efficient cars and manufacturers to drive engine technology in even cleaner directions.

John Redwood: I do not know whether the Minister is going to respond to the debate, but it would be useful to have an answer to the points that I made about the need to strengthen the Bank of England's monetary authority in order to avoid future problems.

Angela Eagle: The hon. Gentleman—[Hon. Members: "Right honourable."] The right hon. Gentleman—my apologies—made an interesting speech commenting on some of the differences between the way in which the American authorities are dealing with the issue of Bear Stearns and the way in which Northern Rock was dealt with here. He will be aware, as will all hon. Members, that a consultation document on the future structure of the tripartite arrangement was issued on 30 January, and I hope that he will respond to it. He will also know that my right hon. Friend the Chancellor has been dealing with his counterparts in the EU and the G7 to determine what lessons need to be learned from the new threats and issues that global financial markets face as a result of the huge increase in globally mobile capital, to which the right hon. Gentleman referred in his speech. There are lessons for everybody to learn, but we know that the problems in the global markets cannot be solved in the UK alone. They have to be solved by international co-operation and agreement.
	As I said, fuel duty will increase, but the restructuring of vehicle excise duty will incentivise motorists to buy more fuel-efficient cars and manufacturers to drive engine technology in even cleaner directions. Increases in aviation duty will further price in the environmental cost of flying, as well as contributing to the funding of our public services.
	What is the Conservative party saying on the environment? Conservative Members always assert that people should vote blue to go green. In his contribution to the Budget debate last Thursday, the shadow Chancellor berated the Government for changing vehicle excise duty rates at all to incorporate environmental signals, arguing that motorists were being unfairly hit—and we have heard a lot more of that kind of attitude tonight. The shadow Chancellor also argued that all green tax revenues should be used to cut taxes elsewhere. Again, we have heard plenty more comments about that in tonight's debate. Yet this weekend, the hon. Member for Runnymede and Weybridge (Mr. Hammond), the shadow Chief Secretary, was pronouncing that there should be no new tax cuts during the first term of any future Tory Government. That must mean that there will be no green taxes either, so what does that say about voting blue to go green?
	What about aviation? As we recognise its contribution to the UK economy, the Government support the expansion of Heathrow, subject to the outcome of the current consultation, but what about the Conservative party? In his policy commission report on economic competitiveness, the right hon. Member for Wokingham (Mr. Redwood) pronounced that the Tory party was in favour of airport expansion. At the very same time, however, in his policy commission report on the environment, the right hon. Member for Suffolk, Coastal (Mr. Gummer) pronounced the Tory party against future airport expansion. Which is it? To clarify that embarrassing policy model, the hon. Member for Surrey Heath (Michael Gove) declared himself in favour of airport expansion on Channel 4 news, while his Front-Bench colleague, the hon. Member for East Surrey (Mr. Ainsworth) pronounced himself against it in a letter to  The Times.

Justine Greening: rose—

Angela Eagle: A pattern seems to be emerging from these facts. The Conservative party hopes that nice new eco-friendly logos and well publicised husky rides will be enough to give the impression that it has coherent policies on the environment. I have listened to hours of debate tonight and I have not heard a single policy idea from the Conservatives.

Peter Ainsworth: Will the Minister give way?

Angela Eagle: If I am going to get a policy idea, I will give way.

Peter Ainsworth: Let me make a further attempt to get the answer to a very simple question. How much carbon will be reduced as a result of the measures introduced by last week's Budget?

Angela Eagle: I am disappointed, as I thought we were going to hear the Conservative Front-Bench position on airport expansion, but there we are. It serves me right for thinking that there might be an answer to that question.

Justine Greening: rose—

Angela Eagle: Perhaps we are still going to get an answer!

Justine Greening: I assume that the Minister is aware that her colleague, the Minister for Lifelong Learning, Further and Higher Education, the hon. Member for Harlow (Bill Rammell), has come out against Stansted expansion, but may I ask her to clarify what she believes the calculation of CO2 emissions from airport expansions should be? Should it include all flights generated by the extra capacity, for example?

Angela Eagle: We still have no answer, to whether Conservative Front Benchers are in favour or against airport expansion at Heathrow. Individual MPs may have particular views, but we are talking about Conservative Front Benchers here. Their environment people go off and tell everyone how they are against airport expansion, while their economic people go off and say that they are in favour of it. They hope that no one will notice the inconsistency. They tell people what they think they want to hear in order to be popular, in the hope that those people will not actually talk to each other, compare notes and realise that Conservative Front-Bench policy is a complete mess.
	The hon. Member for East Surrey mentioned green ISAs in passing during a speech that seemed to declare a policy-free zone for most of the time. How much is that policy going to cost? How much will it cost in higher rate tax relief to have extra green ISAs? How much will it cost in total tax relief? Once again, Mr. Deputy Speaker, answer was there none.
	The hon. Member for East Surrey talked about the purchasing of what he called "foreign indulgences", by which he meant that the UK should somehow not be allowed to purchase emissions from abroad to meet any post-Kyoto targets. Is he against carbon trading? Does he believe that, somehow, 1 tonne of carbon abated over London is worth more than 1 tonne of carbon abated over India? As we are moving towards a lower-carbon economy and battling the threat of climate change, does he feel that that is best done by not allowing any trading between the advanced economies and the economies of the developing world? If people believe that, we will never succeed in the battle that we must have against the threat of catastrophic climate change.
	Labour Members believe that social justice and economic success go arm in arm. The Budget allows us to continue to invest in our public services. Investment here has trebled as a share of national income since 1997. We have replaced the shabby and dilapidated infrastructure that we inherited from the Conservative party with one that we can all be proud of in the public service. We continue to invest in our education system and the training of our work force so that we can compete effectively in the developing global economy and ensure that no child is left behind and every adult can make the most of their talent.
	Even in these difficult times, my right hon. Friend the Chancellor has been able to find money to make further advances in the battle to eradicate child poverty. The Budget will help to lift a further 250,000 children out of poverty and the spending review will continue the funding of Sure Start children's centres, which are transforming the life chances of a generation of less-advantaged kids. What a contrast with the Conservative party, which is still intent on slamming shut the door of opportunity by destroying Sure Start.
	My right hon. Friend was also able to consolidate the gains that pensioners have made under Labour. For the first time in our history, the Government have broken the link between poverty and old age, getting 2 million pensioners out of poverty, and 9 million households will benefit from the additional payment of £50 for the over-60s and £100 for the over-80s this winter. From April, all bus travel will be free for pensioners.
	This Budget will steer us through uncertain times and equip our country for the challenges ahead. I commend it to the House.
	Debate adjourned.— [Mr. David.]
	 Debate to be resumed tomorrow.

COMMITTEES

Justice

Ordered,
	That Rosie Cooper be discharged from the Justice Committee and Mrs Linda Riordan be added.  ——[Tony Cunningham, on behalf of the Committee of Selection . ]

PETITIONS

Post Office Closures (Cumbria)

Tim Farron: I present to the House a petition on post office closures in Cumbria.
	The petitioners declare:
	The Petition of those concerned about Post Office closures in Cumbria,
	Declares that they give their full support to Flookburgh, Hallgarth, Heathwaite, Grasmere, Endmoor, Burneside, Beetham, Dent, Backbarrow, Burton-in-Kendal, Rinkfield, Lindale, Levens, Kents Bank, Storth, Hawkshead and Hutton Roof, as these are an integral part of the local community and to lose them would be a loss to all of them.
	The Petitioners therefore request that the House of Commons urges the Secretary of State for Business Enterprise and Regulatory Reform, to instruct the Post Office Ltd as it conducts its review of Post Office branches, to keep these Post Offices open; and further urges the Government to stop the unnecessary Post Office closure programme, and instead free business from restrictive regulation, invest in the future of the network and stop removing government business to safeguard our Post Offices.
	And the Petitioners remain, etc.
	[P000141]

Wirral Hospital NHS Trust

Ben Chapman: I present this petition on behalf of 1,541 signatories, who are seriously concerned about dermatology care provision in Wirral, South with regard to it being delivered by GPs rather than a dermatology department, and, for example, the detrimental effect on research and development.
	The prayer of the petitioners is as follows:
	The Petition of patients, families and friends of the Department of Dermatology in Wirral Hospital NHS Trust,
	Declares that the petitioners have most serious concerns about the proposed changes to the care of people with dermatological disease regarding managing their conditions in the community. The Petitioners believe that such changes to services without due consideration and discussion of the effects will be detrimental to the health and wellbeing of the patients involved.
	The Petitioners further declare that moving the majority of skin care management to the community has the consequence of reducing funding to hospital-based services. This potentially risks the loss of specialist treatments (both in- and out-patient based), diagnostic skills, opportunities for multidisciplinary clinics and valuable training for nurses and doctors.
	The Petitioners therefore request that the House of Commons urges the Government to reconsider its decision and further urges the Secretary of State for Health to use his powers to reverse the continued scaling back of the aforementioned services at Wirral Hospital NHS Trust and to visit the Wirral Trust at his earliest opportunity in order to assess the views and opinions of the dermatology service users.
	And the Petitioners remain, etc.
	[P000151]

WINTER FUEL PAYMENTS

Motion made, and Question proposed, That this House do now adjourn. —[Mr. David.]

John Robertson: I am grateful for the opportunity to speak about the winter fuel allowance, especially at such an appropriate time, given that the Government set out their policy on it in last week's Budget. As we have extra time, I am happy for my hon. Friend the Member for North-West Leicestershire (David Taylor) to take part in the debate. The winter fuel allowance administration centre is in his constituency.
	Context is all-important when discussing the payment. Account must be taken of factors such as energy prices, inflation and the history of the allowance, and some of the criticisms of last week's Budget show a lack of appreciation of that. As I am sure my hon. and learned Friend the Minister will emphasise, there would be no winter fuel allowance if it had not been introduced by the Labour Government in 1997. When it was introduced it was £20, but from next winter the basic rate will be £250 and the higher rate will be up to £400. In the light of that, some criticisms that I have read are reminiscent of the People's Front of Judea—or should I say the Judean People's Front?—wondering what the Romans, or in this case the Government, have ever done for us.
	It is important to recognise the Government's efforts to tackle fuel poverty. I welcome the recent increases in the winter fuel allowance. The Opposition talk about a revenue-neutral Budget—incidentally, when that is coupled with deterrent taxation, it inevitably means cuts to services—and the shadow Chancellor will not commit to even a one-off increase in the winter fuel allowance, so I know that people in my constituency are far better off under this Labour Government.
	The payment operates against the backdrop of the cost of energy. It is interesting to note that this year's increases have taken prices in real terms to the levels of the 1980s. There was no hint of assistance at that time from the incumbent Conservatives, which was no doubt one reason why 6.5 million households were in fuel poverty when Labour came to power in 1997. Furthermore, that situation had come about after a fall in energy prices that was more than three times the size of the reduction between 1997 and 2004. In the light of that, the Opposition's claim that progress on eliminating fuel poverty has been down to even cheaper prices beggars belief. In Scotland, the Scottish National party is failing vulnerable groups, such as disabled children, and, with its planning policy it is tying Scotland's future to the fluctuation of carbon prices, so my comments on the winter fuel allowance are made in recognition of the fact that the Government have done more than any other party on this front.

Stewart Hosie: Will the hon. Gentleman give way?

John Robertson: No, I will not. I am sorry.
	Of course, we are in Parliament and in government not simply to be better than the alternative, but to improve people's lives, meet their aspirations and bring about our vision of a fairer society. One aspect of that is our target to end fuel poverty among vulnerable groups by 2010, and completely by 2016.
	Before 1997, fuel poverty—which is defined as when a person pays more than 10 per cent. of their income on heating their home—had deliberately not been identified as something the Government should be worried about. In 2004, owing to a combination of declining retail prices and substantial Government assistance, 4.5 million homes had been lifted out of fuel poverty. However, with the winter fuel allowance remaining static and with steep increases in energy prices, the trend has unfortunately been reversed. By the end of last year, about 2 million households had fallen back into fuel poverty, taking the total to 4 million before the recent rises.
	Since December last year, all but one of the six major energy providers have imposed double-digit increases averaging about 15 per cent. The starting gun was fired by npower with a 17 per cent. increase in the price of gas, the main source of heating in the United Kingdom. It was followed by EDF and British Gas, within three days of each other, and by Scottish Power and E.ON within a week of each other. I echo the concern of Energywatch, which has observed that while citing different rises in wholesale costs, with a £1,000 energy bill the major players come within £13 of each other. What a remarkable coincidence. Inquiries into the market by both Ofgem and the Business, Enterprise and Regulatory Reform Committee are welcome, and I look forward to the results.
	It is important to note that while the energy companies have blamed increasing wholesale prices for the price rises, their own profits have rocketed. British Gas recently announced that its profits had risen by 500 per cent. That, in my view, reflects the fact that the motivation behind companies' actions is profit. They are a front for investment, and they are not in business with a moral mission. We need to ask why they have nevertheless been given a free rein with customers. I hope that the lesson from this is not lost on the Government, given the Chancellor's threat of legislation if energy providers fail to increase spending on social tariffs.
	As for this year's price increases, the Department for Business, Enterprise and Regulatory Reform estimates that for every 1 per cent. rise, 40,000 people are pushed into fuel poverty. The recent price hikes will therefore have pushed at least half a million more homes into fuel poverty, which means that the figure was about 4.5 million before last week's Budget.

David Taylor: Does my hon. Friend agree that one of the prime reasons for the excessive price increases of recent months is that the market has moved on from the post-privatisation position, when the number of companies was in the teens? As a result of mergers and acquisitions, a mere handful now operate in an oligopolistic fashion, driving prices up to a higher level than the market would generate. Does my hon. Friend hope that our hon. and learned Friend the Minister will ask the Minister for Energy for an investigation of the apparent market failure?

John Robertson: My hon. Friend is right. During the Committee stage of the Energy Bill we took evidence from the various companies, and I posed a similar question to them. They assured me that that could not possibly happen, and that the increases were due to external forces and nothing to do with profits. That was at the time they were telling us about the 500 per cent. increase in profits. I am sure that that will not have been lost on the Minister for Energy, because he was present during the evidence sessions, and I think that some of the things the Chancellor said last week might have something to do with it. It is important for us to keep tabs on those companies. They seem to be getting their money awfully easily nowadays, and they are certainly not contributing enough to look after those who need to be looked after the most.
	I must ask you to excuse my bad throat, Mr. Deputy Speaker. I was at a football match yesterday, and I did a bit more shouting than usual.
	I wrote to the Chancellor in February asking for double the increase that he eventually announced. I want to focus on the current amount of the payment, and also to take this opportunity to urge the Chancellor, and the Minister, to consolidate the additions and not to leave them as a one-off with an uncertain future.
	The basic rate for 60 to 79-year-olds was raised by £50, from £200 to £250, while the payment for those over 80 was raised from £300 to £400. Those increases were the first since the introduction of the higher rate in 2003 and the first change in the £200 rate since 2001. As a proportion of the payment, they represent an additional 25 and 33 per cent. respectively. One immediate question I wish to ask the Minister is why there is that discrepancy, with the majority of claimants, at a ratio of 3:1, being paid at the lower rate.
	Over the same period that saw increases of 25 and 33 per cent. in the allowance, based on figures from both the Department for Business, Enterprise and Regulatory Reform and British Gas, energy bills in real terms have gone up by 50 per cent. That would mean a significant shortfall of itself, but there is a far greater deficit. The retail prices index, against which energy bills are measured, shows inflation of around 18 per cent. since 2001, and 14 per cent. since 2003. That would mean real-terms increases of around 7 per cent. and 19 per cent. for the winter fuel allowance against 50 per cent. for energy bills. Perhaps the Minister could confirm that the calculations that I have done are correct.

David Taylor: My hon. Friend refers to the desirability of consolidation of the basic allowances, rather than a one-off payment. I think that most people would agree with that, but others might argue that it would be better still to incorporate the amounts into the basic pension entitlement, so that payment becomes part of that from here on in. Half the amount could be paid at the start of winter, on 1 December, and half the amount at the end of winter, the end of February. That approach would commend itself, and indeed higher amounts could be paid to recognise the fact that better-off pensioners would pay tax on the sums that they receive.

John Robertson: I thank my hon. Friend for that intervention. I will touch on that matter at the end of my speech. I do not necessarily come to the same conclusion, but I do come to a conclusion, and I hope that the Minister will comment on my suggestion.
	By the measure that I have outlined, the Government have a long way to go simply to get back to the stage we were at four years ago when 2 million homes were in fuel poverty. Roughly 600,000 of those were pensioners and I believe that, on the figures I have outlined, a far greater number will be in fuel poverty next winter.
	I have no doubt that the Minister will rightly want to point out that the winter fuel allowance is not the only tool the Government use to tackle fuel poverty. Warm Deal, for instance, or Warm Front for those living in England, has helped more than 1 million homes at a cost of £1.4 billion. As he will be aware, however, that is available to more numerous groups than the winter fuel payment, such as those on certain income-related benefits or disability living allowance. Therefore, it is not directly comparable to the allowance figures. I ask the Minister, if he does cite Warm Deal as helping in that regard, how many of those it has helped are pensioners.
	In answer to a written question from the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) on the proportion of a pensioner's bills which the payment would cover, the Minister said in  Hansard on 6 December 2007, at column 1512W, that pensioners' incomes had grown by 29 per cent. in real terms between 1996 and 2005. If we take the state pension from 2001 and 2003, the more significant dates in examining the recent Budget increase, they have increased by 21 and 25 per cent. respectively, so only 3 and 11 per cent. in real terms. That, once again, means that there is a large deficit in the rate at which pensioners' incomes have increased, even with the winter fuel payment, in comparison with the 50 per cent. rise in energy bills.
	As with the Warm Deal scheme, I should point out that any comparison between the state pension and the allowance will be inexact because entitlements to them are not co-extensive. Moreover, with food prices—another staple for pensioners—having increased by 6 per cent. this year, energy bills are not the only burgeoning demand on their finances.
	The trend in fuel poverty has been going in the wrong direction for the past few years and because the payment has remained static, for the next winter pensioners will be far worse off than seven years ago. If we are serious about eradicating fuel poverty, there is clearly a need for the winter fuel allowance to be directly linked to fuel prices by some mechanism. The tragedy of the situation is summed up by the fact that we collate a statistic entitled "the excess winter death figure", which stood at just under 24,000 for 2006. If the Government can afford to double the allowance for inheritance tax, I humbly submit that we can find the money to prevent pensioners from freezing in their own home.
	The final issue I wish to discuss is entitlement to the allowance. All people over 60 are entitled to receive the payment and need specifically to claim to do so. The need to claim the allowance—rather than, for instance, it being an addition to the state pension or paid directly to energy companies—significantly reduces the chance of the targeted group receiving it. From my surgeries, I know that perceived entitlement to financial help does not go hand in hand with actual entitlement to it. In particular, many pensioners I meet do not want to claim for assistance, believing that they can get by without it and should make do with what they have, or feeling that it is charity. In this context, Help the Aged estimates that about £4.5 billion in various benefits goes unclaimed by pensioners each year. All the calculations I have outlined are predicated on the assumption that there is full take-up of the allowance, so the situation is likely to be even worse than I fear.
	Perhaps the rationale behind requiring a claim to be made is that that will deter those who are perfectly well off from applying for the payment simply to supplement their finances. If that is the case, will the Minister assure me that the relevant segment of the unclaimed £4.5 billion comes from the over-60s who are not in need of the allowance failing to claim it, rather than those in fuel poverty and in dire need of assistance towards their bills? Has any assessment of this been made?
	This issue also highlights the fact that the winter fuel payment is indiscriminate, given that all those over 60, regardless of whether they are still in work and regardless of their resources or incomes, are entitled to receive the payment. It is bizarre that the payment is used as a blanket income supplement across the board for over-60s alone, when many vulnerable groups such as children and the disabled are equally susceptible to fuel poverty and receive no assistance at all from the allowance.

David Taylor: I am sure that my hon. Friend agrees that the scheme could be improved in numerous ways without great cost being incurred. One way would certainly be for those who reach the pension age of 60—or 80 for the higher level—during the winter period to be entitled to the amount, rather than having to have reached that age by the fixed date in September. In some of the correspondence I receive, that is identified as an anomaly. Does my hon. Friend get similar correspondence from pensioners?

John Robertson: I do, but at the end of the day we must ensure that the money goes as far as possible; I believe we have to look after all our pensioners, but that we also have to look after those with the greatest needs, and that is where I would like the money to go.
	The point about identifying those whom we need to support also applies to social tariffs. In a briefing from British Gas, the company mentioned
	"the huge wasted effort from searching for eligible customers"
	for their scheme. The Government, however, collect such data for tax purposes and I suggest that a more targeted approach would save money and help those most in need, and, if operated in conjunction with energy providers, this identification could be carried out and they could be engaged with social tariffs. I see no reason why the cost of this should not be met out of their incredible earnings and obscene profits.
	One further change that I urge the Minister to consider is the direct payment of the allowance to the provider as part of that, so as to remove the problem of unclaimed funds. While I recognise the need to be flexible and respond to how individuals want to receive the support, the issue of unclaimed benefits can undermine all of our efforts.
	These proposals involve a recasting of the winter fuel allowance into something that lives up to its name. At the moment, there is no link to fuel prices, the allowance is limited to the over-60s and there is a blanket entitlement to receive it, so a more appropriate description would be the over-60s income supplement—a point alluded to by my hon. Friend the Member for North-West Leicestershire. Although there is no problem with having such a measure, if the purpose is to alleviate fuel poverty, a far more nuanced and targeted approach is surely called for.
	At this point, I shall mention vulnerable groups such as the disabled and children, many of whom live in fuel poverty. I receive a great deal of correspondence about their plight, and I urge the Minister to expand the allowance as part of the overall drive to eradicate poverty.
	I conclude by declaring a vested interest. My constituency has one of the highest percentages of pensioners in the country. It is one of the colder areas of the UK, and more than 15,000 of my constituents claim the winter fuel allowance. I hope that my hon. and learned Friend will take on board the points that I have made on their behalf. I reiterate that we can discuss increasing, extending and modifying the payment, and discuss fuel poverty's being an issue, only because of a Labour Government. I recognise the steps that we have taken, but with people set to die from cold-related illnesses next winter and energy companies pocketing billions of pounds in profits, this is clearly an issue on which we must do more.

Mike O'Brien: I congratulate my hon. Friend the Member for Glasgow, North-West (John Robertson) on initiating this debate. This is an enormously important issue for hundreds of thousands of pensioners throughout the country—in my constituency, as well as his.
	The Government have done more for older people than any other. In the past 10 years, we have lifted more than 1 million pensioners out of relative poverty. Relative pensioner poverty has fallen by a third since 1997, and we have broken the adage that being old means being poor. These days, people are no more likely to be poor if they are old than if they belong to another social category. We have banished the memories of the previous Conservative Government, under whom the poorest scraped a living on—imagine this—under £69 a week. By way of contrast, this year the poorest third of pensioners will, on average, be £2,100 better off than if we had continued with the previous Conservative policies.
	We have achieved this through targeted support to provide security in retirement. This amounts to £11.5 billion a year more than was spent on pensioners in 1997. We are right to be proud of our achievements, but there is more that we need to do. We want to ensure that pensioners claim all the benefits to which they are entitled. I wrote to Members of this House three weeks ago outlining some of the measures that we are taking to simplify application procedures, and informing them how they can get their older constituents to claim the various benefits available to them. A lot of pensioners are still not claiming sufficient benefits. The money is there, we are waiting to pay it and we need those applications to come in.

John Robertson: Does my hon. and learned Friend not accept that in the days when we had pension books, every pensioner knew that they had to have such a book, and so we could get information to them? Nowadays, we do not have such a facility, but there has to be a way that we can contact every pensioner; otherwise, we will have the same problem with a lack of uptake.

Mike O'Brien: We can actually get to every pensioner; the problem is getting those pensioners to whom we can get to recognise that if they are on a low income, they can apply for further benefits. In the past 18 months, we have written in some instances up to four times to people whom we think may be entitled to claim the pension credit, help with their council tax and perhaps housing benefit in respect of their social housing rent. Many of them are not responding. We know their addresses and can write to pensioners, but it is getting the response that is sometimes the problem. We are trying to encourage working with partner organisations and the Pension Service to get more pensioners to claim the benefits. Tackling broad poverty is crucial, but, as my hon. Friend says, we must go further.
	 It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
	 Motion made, and Question proposed, That this House do now adjourn.— [Mr. David.]

Mike O'Brien: It is vital that pensioners can keep their heating on, secure in the knowledge that they can pay their fuel bills. The key to dealing with pensioner fuel poverty is therefore ensuring that pensioners have sufficient money to pay those bills. That was why we introduced the winter fuel payment in 1997—the first ever support targeted to help pensioners with their heating costs. It currently helps more than 8.5 million households, and nearly 12 million people. It has taken us away from the cold, dark days of the last Conservative Government, when freezing pensioners were offered minimal support to stay warm. Instead, Health Ministers went around telling pensioners to buy long johns and woolly nightcaps if they wanted to stay warm in winter.
	We have moved on since then. Back in 1995, just £65 million was spent on cold weather payments for the vulnerable. Last winter we spent more than £2 billion on winter fuel payments. Today, the debate is not about whether we should give pensioners help with heating costs, but about how much more help we should give. In the past decade the winter fuel payment has risen tenfold, and stood at £200 for the over-60s and £300 for those over 80 last winter.
	But we are not complacent. Last year we launched a cross-Government strategy to target the most vulnerable and to ensure that everyone can keep warm and keep well in winter. It brings together the priorities of my Department with those of the Department of Health, the Department for Business, Enterprise and Regulatory Reform, and other agencies to provide a one-stop shop for help and advice on keeping warm and obtaining benefits. Schemes such as Warm Front, which my hon. Friend mentioned, have helped more than 2 million low-income households to improve their energy efficiency, through better heating or insulation. In fact, every minute of the working day, a home receives a new heating system as a result of the scheme.
	As the Chancellor announced last week, we expect energy companies to increase their support to the vulnerable. In particular, we want a fairer deal for the 5 million customers on prepayment meters. Energy companies currently spend about £50 million a year on social tariffs. We want to see that treble to at least £150 million a year in the period ahead. We want to work with the energy companies, but we will take any necessary steps—I say this very clearly—to ensure that that happens.
	I welcome the announcement last week by my right hon. Friend the Chancellor that we will provide an additional payment of £50 for the over-60s and £100 for the over-80s, to sit alongside the winter fuel payment. That vital extra support underlines our commitment to tackling pensioner fuel poverty. It shows that the Government can react quickly to changing fuel prices, and it will ensure that the winter fuel payment continues to provide a significant contribution to winter fuel bills, providing an extra £575 million and benefiting nearly 12 million individuals. Pensioners can therefore heat their homes with more confidence next winter. It sits alongside measures announced last year that will take a further 600,000 pensioners out of paying income tax. I hope that those positive measures will be widely welcomed in the House. They provide significant extra support to our older citizens.
	The generous payments that we have already put in place have, to some extent, been affected by increasing fuel prices. Back in 1997, we were getting the benefits of North sea oil and gas, and there were quite considerable beneficial changes in the world energy market. The result was that during the late '90s and the early part of this century, fuel prices were lower than earlier in the '90s. The benefits from the winter fuel payments were therefore considerable.
	In the past two or three years, we have seen that some of the benefits from North sea oil have been eroded, because much of the energy it supplies has been used. It will be around for many years to come, but the easily accessible oil and gas reserves in the North sea have now been exploited. Some of the new areas will be more difficult, and therefore more expensive, to access.
	We have also seen changes in the international fuel market, with extra demand coming from China, India and several other sources. The world price of energy has therefore risen, just at the point when we have to import more energy than ever before. I well remember that, when I was the Minister with responsibility for energy, I signed the agreement with Norway that would bring about a fifth of our gas from the Norwegian gas fields into Scotland through the Langeled pipeline. That is very beneficial, but we are now much more subject to world fuel prices than we were only seven or eight years ago. The result is that our fuel prices are rising, and that is having an impact on pensioners' budgets.

David Taylor: Does my hon. Friend and parliamentary neighbour agree with those observers who remark that it is easier for a smaller number—now five—of major energy companies to form an unofficial cartel to hold prices at higher levels than they should be, or to push them to levels that the market does not dictate? Would not that be worth investigating? Many observers think that it should be investigated.

Mike O'Brien: Ofgem is there precisely to ensure that such a situation does not arise. The aim of setting up a regulator such as Ofgem is so that it can ensure that the market is operating properly and the interests of the consumer are paid due attention. My hon. Friend suggests that the consumer comes off worst, but Ofgem—an independent regulator proud of its independence—is aware that, especially at a time of fast-rising fuel prices, we need to ensure that energy companies are responding to the concerns of their customers and operating the best competitive market. We rely to some extent on Ofgem to carry out its regulatory and policing activities to ensure that the consumer is protected.

John Robertson: To back up the point made by my hon. Friend the Member for North-West Leicestershire, the difference in price between the dearest and cheapest energy suppliers is only 1.3 per cent. Is that likely to happen if we are in a competitive market?

Mike O'Brien: That depends on whether they are competing at the lowest possible price. If they are, that might well happen. It does not necessarily mean that the market is not working effectively. It is possible that several companies are competing with each other and offering similar low price levels. However, if the prices were not low, but were agreed in some way, that would be improper and a matter that we would expect the regulators to address. Certainly, my hon. Friend the Minister for Energy has indicated that we are keeping a close eye on these issues, to ensure that the energy companies are operating fairly within the market. The extra payment promised by the Chancellor will mean that the winter fuel payment for those over 60, including the £50 top-up, will total £250 next winter. That is a 25 per cent. rise on last year. For those over 80, the winter fuel payment and the £100 additional payment will total £400, a rise of one third on last year.
	Last year, the winter fuel payment covered more than half of the average winter fuel bill. Next year, with rises of £50 and £100, the winter fuel payment will continue to make a significant contribution to pensioners' winter fuel bills. It is difficult to give a precise figure because we do not know precisely what the winter fuel bills will be. These measures will, I hope, ensure that many more pensioners can keep their homes warm, safe in the knowledge that they can meet their fuel bills.
	My hon. Friend the Member for Glasgow, North-West suggested that we should extend the winter fuel payment to other groups. We provide a range of benefits to meet different people's needs and we have a series of benefits in place that are designed to help people who are terminally ill, cannot work or are in need of further help from the state. Older people are particularly vulnerable to the effects of cold weather during winter months. That is why we created the winter fuel payments. They give pensioners the reassurance that they can afford to heat their homes.
	Other groups also have issues, such as the disabled. However, 60 per cent. of those who receive disability living allowance or attendance allowance are over 60 and already receive winter fuel payments automatically. The extra heating needs of children with disabilities arise throughout the year, not just in the winter months. The disability living allowance is worth £109.50 and will increase to £113.75 from April this year, while the poorest are entitled to some extra help through the disability premium in income-related benefits.
	My hon. Friend wanted to know whether it would be possible to reconsider the issue of having two bands, one for those over 60 and one for those over 80. He suggested that it might be possible to have a more targeted, nuanced payment system and drew attention to the fact that some people on relatively high incomes also receive the supplement. We could do various things to change all that. For example, we could take the view that those on higher incomes would be taxed on their winter fuel payment. We could take the view that people on higher incomes would not receive a winter fuel payment and that we would only perhaps allocate it to those who were on pension credit.
	There are all sorts of things that the Government could do to change, alter and redirect the payments. We considered all that and took the view that there was an expectation among pensioners that we would make winter fuel payments to them as we did in the past and as the Government had committed to do in their election manifestos, and that we ought to continue to do that. If there needs to be a debate about changes to the system, let us have a debate by all means. At the moment, the Government's view is that we have made commitments on winter fuel payments and we want to keep to them.
	The two age-related bands make the system easier for people to understand and help older people plan ahead secure in the knowledge of the contribution they will receive towards their winter fuel bill. The current age split takes account of the fact that older pensioners over 80 are more likely to live alone or in less energy efficient homes. They are more likely to have a lower income than recently retired people. People over 80 are less likely to have well-paying final salary pension schemes. Many of those who are retiring now will have good quality final salary pension schemes, although not all of them will. People over 80 tend to spend a higher proportion of their income on fuel. Our view has been that there is a strong argument for making payments to those over 80. Of course, those older pensioners are also likely to be most vulnerable to not sensing that they are getting cold and are the most likely to fall victim to hypothermia. There is an argument for ensuring that we keep things simple while recognising that the over-80s deserve an extra payment.
	My hon. Friend has made a powerful argument, and I congratulate him on raising the issues, which do call for a wider debate. The Government are committed to tackling pensioner poverty, including fuel poverty. We have made considerable progress in the past decade, with pensioner poverty falling significantly. The winter fuel payment is an important part of our strategy; we know that our cold winters affect older people more than the rest of the population. The winter fuel payment provides a guaranteed payment to all older people. It is an important contribution towards household fuel bills.
	The extra money announced by the Chancellor last week will ensure that the winter fuel payment continues to make a significant contribution to pensioners' winter fuel bills next year; it is a generous extra payment, keeping pace with changes in the market. That will give older people the confidence to continue to keep their home warm, and hopefully it will keep many more of them alive. We hope that that will be the outcome of the changes that we have made.
	It can always be argued that the Government could pay more and do more, but of course they have to ensure that they balance the various demands for public expenditure. However, pensioners were rightly a high priority in the Budget last week. As Minister with responsibility for pensions, I am pleased that the Chancellor listened to representations, not only from me but from people such as my hon. Friends the Members for North-West Leicestershire (David Taylor) and for Glasgow, North-West, on the need to consider, and respond to, the issue of rising winter fuel bills. The Chancellor did so by increasing the amounts that will be paid next winter. I am glad that that was done, and I hope that pensioners will feel the benefit of it.
	 Question put and agreed to.
	 Adjourned accordingly at sixteen minutes past Ten o'clock.